PANews reported on December 30 that Singapore's crypto investment institution QCP Capital issued a statement today saying that as expected, we have witnessed the typical volatility sell-off after the expiration of options at the end of the quarter, as volatility has fallen by 2-3 volatility points since the record options expiration on Friday.
Although Bitcoin is consolidating near the bottom of a one-month trading range and has flat returns for the month, both Bitcoin and Ethereum have performed quite well in the fourth quarter: Bitcoin is up 48% and Ethereum is up 30%. However, it may be too early to summarize the quarter. Just yesterday, Saylor once again released his Bitcoin purchase tracker, which may indicate another round of impending purchases, further supporting prices.
While there could be another round of buying, we are skeptical of the likelihood of significant volatility over the New Year, especially given the healthy funding situation. With average returns in January (+3.3%) relatively close to December (+4.8%), we can expect spot prices to remain in this range in the short term before starting to pick up in February.
Options flows reflected similar sentiment, with front-end volatility gradually declining and March calls seeing the most risk reversals bid, driven in part by a large number of March call options (120,000-130,000) bought last Friday.
