Data: Deribit Bitcoin Volatility Index breaks 44, recording the largest increase since November 2024

As Bitcoin saw a significant drop on Thursday, the volatility in the options market surged notably, with the Deribit Bitcoin Volatility Index (DVOL) rapidly climbing from around 37 to above 44, marking the largest increase since November 2024.

DVOL is regarded as the "VIX" of the crypto market, reflecting the options market's expectations for price volatility over the next 30 days. An upward movement in this indicator suggests that traders are paying higher premiums for downside risk, leading to rising options prices and increased market risk aversion. This spike in volatility occurred amid a resurgence of macroeconomic uncertainty, including rising risks of a U.S. government shutdown and noise surrounding the future leadership of the Federal Reserve. However, in historical terms, Bitcoin's implied volatility has not yet reached extreme levels.