Our monthly report delves into insights from options volatility to inspire your next crypto move.

: April 2025 saw BTC's implied volatility surge above 75% due to tariff chaos, but it collapsed to 35% within a week, indicating a surprising short-term drop in volatility expectations despite ongoing macro uncertainty.

: BTC's return above $100K was met with muted enthusiasm in the derivatives market, suggesting that 

traders no longer view this level as a significant psychological barrier, and the rally isn’t likely to be sustained.

: ETH significantly outperformed BTC with a 23% rally, leading to increased demand for short-dated calls and a positive shift in the options market, highlighting renewed bullish sentiment.

: Historical trends suggest a potential summer lull in volatility in store for BTC, raising questions about whether this pattern will repeat in 2025 amidst ongoing macroeconomic challenges.

Bitcoin’s volatility plunges in late April

April 2025 witnessed significant volatility in the cryptocurrency market, particularly influenced by US trade policies. As President Trump announced steep reciprocal tariffs, the crypto landscape experienced sharp fluctuations. Bitcoin (BTC) initially demonstrated resilience, despite widespread sell-offs in equities and the US dollar, only to succumb to a decline from $88K to $75K by early April. This period was characterized by a dramatic rise in implied volatility that peaked above 75% as traders sought protection through short-dated puts. However, as the tariffs faced moderation, implied volatility plummeted to 35% by mid-April, marking the lowest level since early March.

Interestingly, while short-tenor volatility collapsed, 

the back end of BTC's term structure remained elevated, signaling that market participants expect heightened volatility in the mid-term

. Amidst this backdrop, realized volatility fell below the five-year seasonal average, paralleling similar trends in previous years and suggesting a 

. The historical pattern contrasts that BTC often experiences a rebound in volatility heading into May, raising questions about whether this trend will persist.

Subdued derivative response suggests Bitcoin rally might not endure

The market's reaction to BTC's resurgence above the $100K threshold was notably subdued compared to previous instances. While BTC rallied 20% following the initial tariff sell-off, the derivatives market displayed a muted response. The 25-delta put/call skew, a measure of market sentiment, indicated only a slight bias toward out-of-the-money calls, contrasting sharply with sentiment previously when BTC first breached the $100K mark in December 2024. This lack of exuberance suggests that traders no longer view $100K as a significant inflection point, raising concerns about the sustainability of the rally. 

Meanwhile, funding rates and implied volatility — though still bullish — didn’t reach the extremes observed in earlier months, indicating more cautious market sentiment. The relationship between BTC's spot price and implied volatility suggests that although traders are optimistic, they’re waiting for BTC to approach previous all-time highs before adjusting their volatility expectations.

Ethereum's option data points to further rally

In stark contrast to BTC, Ethereum (ETH) displayed remarkable resilience and outperformed major cryptocurrencies, gaining 23% overnight following favorable trade news. This rally catalyzed a surge in demand for short-dated calls, pushing front-end volatility expectations significantly higher. The response from the derivatives market was robust, inverting the term structure and indicating renewed bullish sentiment toward ETH, even as it’s trading well below its all-time high.

The ETH options market exhibited a shift from neutral to slightly negative skew, to a 10% bias favoring out-of-the-money calls, reflecting the market's confidence in ETH's potential to regain lost ground. Despite overall macroeconomic uncertainty, the demand for ETH options suggests that traders are optimistic about Ether’s future price movements.

In conclusion, April 2025 highlighted the complex interplay between macroeconomic factors and cryptocurrency market dynamics. While BTC faced challenges in eliciting strong responses from derivatives markets upon recrossing the $100K threshold, ETH's performance indicated a divergence in market sentiment. As traders navigate the evolving landscape, the potential for seasonal volatility patterns and the influence of macroeconomic developments will remain critical factors in shaping future market expectations.

Advanced

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Bybit X Block Scholes options volatility report (April 2025): Data suggests Bitcoin rally might not endure, but Ether sees further upside

Our weekly crypto derivatives analytics report delves into macro events; the current state of crypto and trading signals from spot trading volume; and futures, options and perpetual contracts.

After mostly trading sideways at the end of April 2025, a US-UK trade deal sparked a crypto rally. BTC surged past $100K for the first time since February, but it’s ETH's performance that captured the derivatives market's attention. 

A 23% increase in ETH's spot price led to an inverted term structure and a spike in front-end volatility. The put/call skew for ETH shifted from a bearish bias to a nearly 10% skew toward OTM calls. Other sentiment indicators, such as perp funding rates and futures yield, also supported the rally. In contrast, while BTC's funding rates and skew have increased, its implied volatility remains low at 40%, over 30 points below ETH's 7-day implied volatility.

Please check out the report’s highlights.

ETH’s record performance since 2021 was propelled by positive term structure

ETH has significantly outperformed BTC and the top 10 cryptocurrencies, marking its largest single-day gain since May 2021. The options market has reflected this enthusiasm, with implied volatility for short tenors rising sharply and inverting ETH’s term structure, thus contrasting with BTC's muted, positively sloped structure. The 7-day tenor for ETH is now trading at a 33-point premium over that for BTC. 

While puts dominate BTC's open interest, ETH is seeing the opposite trend. On May 8, 2025, options volumes surged over $120M, more than double the typical monthly volume, with $60M more in calls than puts. ETH now boasts a positive futures curve and funding rates, as well as a strong skew toward OTM calls.

ETH sees exceptionally bullish put/call skew

ETH's substantial outperformance in the current crypto rally has led to bullish sentiment in its derivatives markets. Funding rates have surged, futures yields are strongly positive and the put/call skew has shifted significantly toward OTM calls, now close to 10%. This starkly contrasts with early April, when the skew was 20% toward OTM puts. Although ETH has underperformed (relative to BTC and other "ETH killers"), it has rebounded in this rally, with the ETH/BTC ratio rising after spending most of the year declining.

Open interest for Bitcoin options increased, with implied volatility remaining suppressed

The announcement of the new US administration's first trade deal, nearly 30 days into Trump's 90-day tariff pause, jolted crypto markets, pushing BTC back up above $100K. Surprisingly, implied volatility has remained suppressed, failing to invert BTC's term structure, with front-end volatility trading at around an 18-month low of 35-40%. On May 8, 2025, options volumes surged, with call volume reaching $189M, reversing last week's trend of higher put volumes. Meanwhile, open interest rose steadily to exceed $300M, the highest level this month, but remains significantly larger for puts than for calls despite the price increase.

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Bybit X Block Scholes crypto derivatives analytics report (May 9, 2025): Ether’s put/call skew turns remarkably more bullish than Bitcoin’s

This article explores how Sign works, its flagship products (such as TokenTable, SignPass and EthSign), its native token (SIGN) and how to trade SIGN on Bybit.

Sign is an omnichain attestation infrastructure that empowers users and developers to verify real-world claims on-chain. Built for a more transparent and decentralized future, it eliminates the need to “just trust” and enables everyone to verify with cryptographic proof.

This article explores how Sign works, its flagship products (such as TokenTable and EthSign), its native token (SIGN) and how to trade SIGN on Bybit.

 is an omnichain attestation protocol designed to make it easy for anyone to verify the authenticity of any claim — 

. Whether it’s a document, credential or user identity, Sign transforms traditional trust models into verifiable, cryptographic attestations. 

Sign’s mission is to replace outdated, opaque validation systems with transparent, 

 proof — enabling a future where “verify” replaces “trust.” Through tools like schema registries and digital signatures, Sign empowers users to bring accountability and integrity to digital interactions.

Sign is developed by the team behind EthSign, a 

-native e-signature and agreement platform. Its core team brings deep experience in 

 development and cross-chain integrations.

The project is backed by top-tier investors, including Sequoia Capital China (now known as HongShan Capital Group), Mirana Ventures, HashKey Capital and Hack VC.

This strategic funding positions Sign as a foundational layer in the web3 infrastructure stack.

Sign allows users to create attestations — cryptographically signed statements that prove the validity of claims, such as credentials, achievements or actions. These digital proofs can be verified by anyone at any time, making them tamperproof and transparent.

Sign’s key technical elements include a schema registry that ensures consistent data formatting, digital signatures proving authenticity, and on- and off-chain attestations with support for revocation or updates

This system acts like a programmable layer for web3, bringing a new level of trust to identity, credentials and data exchange.

TokenTable is Sign’s flagship token distribution platform. It helps projects unlock, distribute and manage tokens transparently and securely at scale.

It uses Sign’s attestation engine to verify token unlocks, 

 and vesting schedules, ensuring traceable, auditable token flows.

SignPass is a blockchain-based identity solution that brings real-world credentials on-chain. One notable implementation is the Sierra Leone PR Card, used for the world’s first government-approved on-chain permanent residency program.

SignPass offers encrypted on-chain records for easy 

 verification, physical ID issuance for daily identity use and streamlined digital application systems for cross-border access.

It showcases the way blockchain can modernize public sector services worldwide.

EthSign is a decentralized contract signing platform that lets users create, sign and store legally binding agreements directly on-chain. It removes intermediaries and ensures documents are immutable and accessible.

EthSign reinforces Sign’s mission by bringing traditional documentation into the realm of verifiable web3 attestations.

The SIGN token is the native utility token powering the Sign ecosystem. It’s used for:

The total supply is capped at 10 billion SIGN, with 1.2 billion tokens in circulation. While the fully diluted valuation (FDV) sits above $746 million as of May 7, the circulating market cap is approximately $89.6 million. SIGN continues to gain traction across exchanges and developer networks.

SIGN is available for trading on Bybit via Spot trading and as a USDT Perpetual contract. Bybit offers up to 75x leverage for the SIGNUSDT Perpetual contract and supports secure, high-liquidity spot trading.

Start exploring the future of attestations with SIGN on Bybit today.

Intermediate

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Sign (SIGN): Web3 protocol for trustless attestation

Compliant trading means following platform rules and avoiding manipulative behavior. Learn more about how you can trade responsibly and compliantly on Bybit.

Crypto trading has come a long way from what used to be the domain of institutional players, and is now open to almost anyone with an internet connection. It’s easier than ever to buy and sell digital assets, try new strategies or build a portfolio from scratch all within minutes.

But with that level of access comes responsibility. As more people join the market, the need for fairness and accountability has become even more important. This isn’t just about price charts or profits — it’s about keeping the playing field level for everyone involved.

At Bybit, we take that responsibility seriously. We're here to offer the tools, safeguards and education you need to help you trade responsibly and to protect the platform from misuse.

This article describes what it actually means to trade compliantly, why it matters — and what can happen if things go off course.

Compliant trading means playing fair, following the platform’s rules, staying within the boundaries of what’s allowed and avoiding anything that could unfairly affect the market.

It’s not about avoiding risk: it’s about knowing what you’re doing, using official tools the right way and making sure your trades aren’t causing harm to yourself or others.

In short, compliant traders don’t just focus on their P&L — they understand that how they conduct themselves while trading matters. Responsible trading protects their accounts, keeps the platform stable and builds long-term credibility in the crypto ecosystem.

Why does responsible and compliant trading matter?

It’s easy to assume that compliance is only something platforms or regulators need to worry about. But in reality, every trader plays a part. When someone attempts to exploit the system — for example, by coordinating mass trades through off-platform channels — the consequences can ripple across the entire market.

In extreme cases, irresponsible trading behavior can:

And if the trades in question are linked to coordinated action, use of fake accounts or external bots? That opens the door to account freezes, compliance reviews and, in some cases, permanent suspension.

Bybit has a responsibility to act when the system is being abused — not just for legal reasons, but in order to protect honest traders.

Common examples of noncompliant or risky behavior

Some traders join Telegram groups or online communities in which KOLs (key opinion leaders) give out coordinated trading instructions (for example, “Buy token A now, sell it in an hour”). This practice isn’t just risky: it often involves a small number of insiders benefiting while the majority end up with losses.

When many people follow the same instruction all at once, it can artificially inflate the price of a low-liquidity token. The KOLs then exit at the top —while others are left with falling prices and unexpected liquidations.

Such a textbook case of market manipulation violates our Terms of Service and, depending upon jurisdiction, could violate financial laws.

Using bots or unverified trading strategies

Some Telegram groups may seem convincing, but trades coordinated off-platform are often unverified and may serve someone else’s agenda. 

 programmed to front-run trades, mimic pump-and-dump strategies or follow unverified signals can trigger compliance red flags and may lead to account restrictions.

Bybit does not support trading bots from unverified sources. They can also trigger flags in our monitoring systems, which may result in account suspension.

Using another person’s account or sharing login credentials — even if it’s with a family member — goes against both Bybit’s policies and global 

(AML) rules. It also opens the door to fraud, loss of funds and irreversible penalties.

Tips for responsible and compliant trading on Bybit

The good news is that there’s a better way to trade — responsibly, safely and with confidence, starting with the right tools, mindset and habits.

Use copy trading the way it’s meant to be used

 is one of Bybit’s most trusted features, and for good reason. It gives users access to professional traders’ strategies while maintaining full transparency. However, it only works if you follow verified 

These traders have been vetted and their stats are fully visible. You can view their P&L, risk settings and trade history. Bybit also provides built-in tools, such as 

 and staking products allow you to earn passive yield with minimal effort. These products are fully backed by our infrastructure and undergo regular audits, and are a compliant way to generate returns without chasing risky trades.

No matter how convincing a Telegram group may sound, remember that trades executed outside of regulated channels are unverified and often unaccountable. They may be coordinated for someone else’s gain.

 offers a wide range of articles and tutorials, covering everything from indicators and oscillators to advanced portfolio strategies. Before following any external signal, it’s worth spending 10 minutes to understand the rationale behind it. In trading, knowledge is your best form of compliance. Before you enter any position, ensure that you fully understand the asset you're trading, the current market conditions and the risks involved.

, never share your login credentials, and always enable two-factor (2FA) authentication. In addition, all trading activity should originate from your own account and remain under your own control.

Bybit’s systems are designed to flag irregular behavior. If your account is found to be engaging in prohibited activity, even unintentionally, you may be:

We take these steps in order to protect the broader user base and to uphold market fairness.

Being compliant doesn’t mean missing out on opportunity. In fact, it’s the opposite. It means you’re using the platform the way it was designed, with safeguards, transparency and trust. Shortcuts might look appealing in the short term, but they rarely end well. The most successful traders on Bybit are the ones who understand risk, stay informed and trade with integrity.

Take the time to learn and use the tools available to you. And remember: protecting your account starts with choosing how you’ll trade.

Beginner

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How to trade compliantly and responsibly on Bybit

Options

Designed to profit from different levels of volatility, the butterfly spread and its variations are suitable for intermediate/advanced traders.

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In options trading, the butterfly spread strategy is a neutral approach that profits from movement in either direction in the market. It’s structured to combine both bull and bear spreads, and comes with controlled risks and profit.

By default, the butterfly spread has four positions (either four calls or puts) and three strike prices with the same expiration date: One is 

, while the other two are below and above the ATM strike price, respectively. For example, if an 

, the lower strike price would be $1,150 − $150 = $1,000, and the upper strike price would be $1,150 + $150 = $1,300.

Different types of butterfly spreads arise from different combinations of put and call options, which determine whether the spread profits from low — or just enough — volatility. 

All margin requirements for options in the U.S. are regulated by 

, also known as Reg T. For long butterfly calls, all the options contained in it must be the same in terms of the underlying asset, the interval between prices, and the expiration date.

Basically, the long butterfly call comprises two short positions (call or put) of the same components (strike price, class, expiration date) bordered by a long position of the same class (call or put) at a higher strike price, and one long position of the same class with a lower strike price.

 refers to how much time decay affects the total value of a position. For every asset, the total value reduces in relation to the proximity of the expiration date (i.e., the closer a position gets to its expiration date, the lower its value becomes).

Time decay (or Theta) works against the long call butterfly spread and favors the short call butterfly spread. This means a long call has a negative theta (loses money with time decay), whereas a short call has a positive Theta (makes money with time decay).

However, the case becomes different for the long call if the asset price ranges between the higher and lower strike prices, and Theta becomes positive. If it moves out of range, Theta becomes negative as the time to expiration draws closer.

Since the actual volatility of an option can't be predicted before entering a position, the assumption or calculation of 

 became a consideration in options trading. Volatility shows how much an asset price fluctuates in terms of percentage. In options, as volatility increases, the price of an option rises with it when other factors are kept constant. 

 is the technical word that represents volatility.

Long options make money from an increase in volatility, while short options lose money when volatility increases. The reverse is the case when volatility reduces. 

For a long call butterfly spread, the long call rises (makes money) when volatility falls. When volatility increases, the long call falls (loses money). Therefore, the long call butterfly has a −Vega (negative Vega) and should only be bought when there's high volatility, with a bias for a subsequent decline.

There are different types of butterfly spreads. Some of the most common are:

The long call butterfly spread is achieved by combining four call options. You sell/write two ATM call options, buy one 

 call option at a higher strike price, and buy one in-the-money (ITM) call option with a lower strike price. You receive a debit when entering the positions (i.e., you incur the total cost in premium paid).

The long call butterfly spread comes in handy when the bias is a ranging or stagnant market. When there’s low volatility, an investor expects the underlying asset not to move much — or even at all. Profit is recorded when the underlying asset retains the ATM strike price at the time of expiration. 

The short call butterfly spread is also a combination of four calls, but this time in a reversed manner. You buy two ATM 

, sell one ITM call option with a lower strike price, and sell one OTM call option. You receive credit when entering the positions. Essentially, you get paid to open the positions. 

The short call butterfly spread is activated when there’s a bias for notable price movement due to high volatility. Profit is recorded if the underlying asset 1) closes above the upper strike price at the time of expiration, or 2) closes below the lower strike price at the time of expiration.

The opposite of the long call butterfly spread, the long put butterfly spread is a combination of four put options. You sell two ATM puts, and buy the other two at a lower and higher strike price, respectively. You also receive a debit when entering this position, and profit is recorded if the underlying asset remains ATM at the time of 

The short put butterfly spread is also the opposite of its twin, the short call. It involves buying two ATM puts, selling one ITM put at a higher strike price, and selling one OTM put at a lower strike price. Maximum profit is recorded if the underlying asset closes below the lower strike price, or above the higher strike price. 

Here’s how the iron butterfly spread is set up: 

The outcome of this combination is a trade that works well for low volatility. Maximum profit is recorded if the underlying asset remains at the middle strike price.

Here’s how the reverse iron butterfly spread is set up: 

This setup creates a debit that works best in highly volatile situations. Maximum profit is recorded when the underlying asset moves above the upper strike price, or below the lower strike price.

For a long or short call butterfly spread:

For a long or short put butterfly spread:

The butterfly options strategy combines a bull spread and a bear spread that converge at a middle strike price. The basic setup for a butterfly spread requires opening four positions:

This strategy is designed to help a trader profit from movement in either direction in the market — or no movement at all. Depending on the combination of options (either call or put), the strategy can benefit from both low and high volatility.

Who Is the Butterfly Spread Strategy For?

Due to its complexity, the butterfly spread strategy is best suited to intermediate/expert traders and investors. While it has a capped profit and limited risk attribute, strong technical knowledge is required to properly wield the butterfly options strategy.

Before considering butterfly options, traders first need to fully grasp 

 (Gamma, Theta, Vega, Rho) and other contributing factors. Sound understanding of the Greeks cannot be overemphasized, because there will be times the market changes direction from initial prediction, and live adjustments will be needed for the strategy to avoid maximum losses.

The butterfly spread is an advanced strategy because of the controlled risk and profit it offers. The long butterfly strategy is activated when there's a neutral or mildly bullish bias. It’s dependent on the difference between the asset price and the middle strike price, when the position is set up.

In a scenario where the asset price is very close to the middle strike price (or exactly the same with it when the position is activated), an investor's bias would be neutral. Likewise, if the asset price is below the middle strike price at activation, the investor's bias would be mildly bullish (i.e., the asset price should rise to the middle strike price at the time of expiration).

The long call butterfly spread records profit when the asset remains at the middle strike price or ATM strike price at the point of expiration. For breakeven, there are two points, since there are two spreads. Here's how to calculate them:

: Higher strike price for a long call or put = Strike price 

: Lower strike price for a long call or put = Strike price 

For a long call butterfly spread, the maximum profit potential is the difference between the middle strike price and the lower strike price 

 the premium paid (cost of opening the position + commissions). Recall that maximum profit is only recorded when the asset price remains at the middle strike price or ATM at the point of expiration. 

Although not impossible, it’s unlikely that you’ll obtain maximum returns with the butterfly spread strategy. A good percentage to take profit in the long call butterfly is 20–50% of the maximum profit.

One of the advantages of the butterfly spread strategy is its limited risk. Maximum loss potential is restricted to the total premium paid (i.e., the cost for opening the position + commissions). Loss can be incurred in two ways: If the asset price closes above the higher strike price or below the lower strike price at expiration, the other calls expire and the total premium paid is lost to the market.

 is currently trading at $1,150. If investors believe ETH will move slightly, or remain stagnant over the next couple of months, they’ll go for the long call butterfly spread to potentially profit from the stagnancy. The investor writes or sells two call options on ETH at a strike price of $1,150, and buys two other call options at $1,300 and $1,000.

In this assumption, the investor records maximum profit if ETH’s price remains at $1,150 at the time of expiration. If ETH closes above $1,300 or below $1,000, maximum loss is incurred. 

One important thing to additionally note is the premium paid. For example, if ETH closes between $1,300 and $1,150, a loss or profit could be recorded, depending on the premium paid. Let's take $50 as the premium paid to enter a trade. If the price closes between $1,200 and $1,100 (i.e., adding and subtracting the premium to both ends), the trade will record profit. Anything above or below these prices will incur a loss.

Bybit offers multiple cryptocurrency options. To trade 

As seen in the below snapshot, you can view all available options on the exchange. To get started, click on the option of your choice (currently, only 

 are available), fill in the quantity of crypto you want to purchase, and click on 

 along with their corresponding strike prices.

Click the call/put options you prefer, in order to enter the quantity of the crypto you want to trade, and then place your order.

Here are two tips to help you maximize profits from the butterfly spread strategy:

The butterfly spread options strategy has a better 

 strength against very large intraday volatility and large price movements than other options strategies.

Regardless of how protective a strategy is, there will always be risk involved. Here are some common risks associated with the butterfly spread strategy:

If what you seek as a trader is to profit from different market conditions and get paid constantly, then the butterfly options strategy could be your best bet. It offers a better hedge to market fluctuations and uncertainty. The only thing required is to apply this strategy with adequate understanding and discipline — so that outcomes can work in your favor.

Butterfly Spread: Stand to Profit With Limited Loss

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