Is bitcoin halving already priced in? The options market means no

When it comes to bitcoin halving, the opinions of the crypto community differ widely, while some think that the price will have a big impact, for others it is clear that nothing will happen. Skew has now released the research results, and it appears the upcoming event is not yet priced in.


Will Bitcoin Halving Affect The Price?

London-based research firm Skew tried to answer the question of whether the bitcoin halving event is already priced in or not. According to an investigation by the company, not everything has been priced in, although there are many disagreements.

In a series of tweets, the company explained how to find out whether a particular event is priced in or not by taking a closer look at the implied volatility of the asset, which resembles a “buckled” rate.

Implied volatility is a term that comes from the options area and reflects the market’s expectations for a particular asset. It shows how turbulent the market will be in the future. Implied volatility is also a handy tool for calculating specific price targets for traders, even if these predictions do not necessarily turn out to be correct.

Option traders can bet on a falling and rising price at the same expiration dates, which is known as a calendar spread strategy. In this way, they can take advantage of the expiration of time (the tendency of option prices to decrease over time).

Skew points to the fact that implied volatility will not be impacted in the second quarter, meaning that the Bitcoin options market does not expect significant moves after the halving event. However, traders expect volatile movements in March, shortly before halving.

There is therefore a possibility that it is another rumor of “buy the rumor, sell the news”, which is reminiscent of Litecoin’s impressive price recovery in the second quarter of 2019, which has completely evaporated after the actual halving.

At the moment, the market seems to want to see Bitcoin prices higher up, but whether this has to do with the approach of the halving event is questionable. Almost daily, new analyzes come out of which course Bitcoin will reach through the event. It remains to be seen whether the whole thing will work at all, there is no guarantee.