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Our monthly report delves into insights from options volatility to inspire your next crypto move.
In June 2025, BTC implied volatility dropped to 28%, with 7-day realized volatility at 22–25%, extending a long-term downtrend despite major macro shocks.
This volatility decline aligns with the post–January 2024 launch of US spot ETFs, which has led to fewer and milder volatility spikes.
ETF flows may be stabilizing BTC. So far, 2025 shows more small, positive daily returns, indicating institutional buyers softening sell-offs and anchoring demand.
ETH hasn’t seen similar effects, as its spot ETFs have lower inflows and consistently capture a smaller share of daily trading activity.
Figure 1. BTC at-the-money options’ implied volatility at several constant tenors. Source: Block Scholes
Since 2020, Bitcoin’s implied volatility (reflecting market expectations of future price swings across different time frames) has trended downward, pointing to growing asset maturity. However, June 2025 marks a significant milestone, as 7-day BTC option volatility dropped below the uncommon 30% threshold, hitting 28% — a level last seen in October 2023.
Realized volatility, which measures actual price movement over time, mirrors this softness, falling to 22–25% — levels not observed in nearly 20 months. This double dip in volatility implies Bitcoin is trading with exceptional calm, even amid macro turbulence. Notably, such subdued volatility isn’t necessarily shared across the crypto landscape. By comparing BTC’s realized volatility to that of both ETH and SOL, it becomes clear that this decoupling may signal asset-specific factors at play rather than a sector-wide slowdown.
Figure 2. Ratio of ETH/BTC 7-day realized volatility (white), with BTC (orange) and ETH (purple) 7-day realized volatility (on hourly returns). Source: Block Scholes
On a relative basis, ETH and SOL have shown significantly higher volatility than BTC. In June, the ETH/BTC 7-day realized volatility ratio ranged from 1.68 to 2.34 — below May's peak of 2.89, but still elevated. Since July 2024, this ratio has steadily climbed, highlighting the widening gap. While BTC realized volatility has sharply declined (especially post–January 2025), ETH has held near its historical average of around 70% as BTC dipped to near 30%.
SOL’s divergence is even more pronounced. On Jun 20, 2025, the SOL/BTC ratio spiked to 2.96 — matching January’s high during the launch of the $TRUMP meme coin. Excluding these spikes, this level was last exceeded in January 2024. These trends suggest BTC’s volatility is falling not just in isolation, but relative to other major crypto assets.
Figure 3. ETH/BTC realized volatility ratio, 60-minute returns across 7-, 14-, 30- and 90-day lookback windows (left-hand axis), and net inflows into Spot BTC ETFs (white, right-hand axis). Source: Block Scholes
While BTC volatility declined notably following the launch of BTC Spot ETFs, ETH hasn’t followed the same pattern since its ETFs debuted in July 2024. ETH volatility had been falling between early 2021 and mid-2023, but has since held steady or increased across all measured durations, and continues to trade at a volatility premium to BTC (recently exceeding a ratio of 2x).
One likely reason for this is the relative strength of ETF-driven buying: BTC Spot ETFs consistently represent a far larger share of total trading volume than ETH Spot ETFs. For instance, just before the 2024 US election, BTC ETF inflows were 36 times greater than for ETH, relative to their respective trade volumes. This disparity in institutional demand helps explain why ETF flows may be dampening BTC’s volatility — but not ETH’s.