Bybit x Block Scholes Sep Volatility Report: Volatility in review: Volatility awakens with the first term structure inversion in months

Key Insights:

• BTC volatility awakens from a long period of dormancy. After steadily declining since April, BTC’s implied volatility broke sharply higher in mid-October, following a $19B liquidation cascade — the largest in crypto’s history. 

• The first term structure inversion in months. The October selloff, triggered by a re-escalation of the tit-for-tat trade war between the US and China drove front end volatility higher, inverting the term structure of volatility for BTC for the first time since April 2025. 

• The October breakout echoes 2023. The months-long lull in BTC volatility and an explosive October breakout has similarities to 2023. Back then however, the volatility breakout was ignited by optimism around the launch of Spot Bitcoin ETFs. This time, the breakout was triggered by a macro event.

BTC’s still got volatility when it matters