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Realized volatility surges above options volatility for the first time since FTX collapse

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Realized volatility surges above options volatility for the first time since FTX collapse

Definition

Implied volatility is the market’s expectation of volatility. Given the price of an option, we can solve for the expected volatility of the underlying asset.

Viewing At-The-Money (ATM) IV over time gives a normalized view of volatility expectations which will often rise and fall with realized volatility and market sentiment. This metric shows the ATM implied volatility for options contracts that expire one week from today.

Realized volatility is the standard deviation of returns from the mean return of a market. High values in realized volatility indicate a phase of high risk in that market rolling window of 1 week.

Quick Take

  • Realized volatility has just gone above options volatility for the first since FTX collapsed back in November.
  • Each time this occurs, Bitcoin tends to tumble down in price
  • Realized volatility exceeded 60%, while options volatility is at 59%
  • At the beginning of 2023, volatility was multi-year lows for Bitcoin before Bitcoin surged to $21k.
Realized vs. Options Vol: (Source: Glassnode)

Research Analyst at CryptoSlate

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James is passionate about data, technology and identifying trends. James is a freedom and technology maximalist. Whilst seeing Bitcoin as the greatest invention of the 21st century.

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Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.

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Accusations

Former President Of FTX US Shares His Experience And Relationship With CEO Sam Bankman-Fried In Detailed Twitter Thread

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Former President Of FTX US Shares His Experience And Relationship With CEO Sam Bankman-Fried In Detailed Twitter Thread

The former president of FTX US, Brett Harrison, published a 49-part Twitter thread explaining why he left the firm and his relationship with co-founder Sam Bankman-Fried (SBF) of FTX. Before his role at FTX US, Harrison worked with SBF at Jane Street and prior to joining FTX, he worked for Citadel Securities. In the Twitter thread, the former president of the U.S. subsidiary explained that his “relationship with Sam Bankman-Fried and his deputies had reached a point of total deterioration, after months of disputes over management practices at FTX.”

Brett Harrison’s Deteriorating Relationship With FTX CEO Sam Bankman-Fried Leads to Resignation

On Jan. 14, 2023, Brett Harrison, the former president of FTX US, shared his personal account of his experience working at FTX US, the United States-based crypto exchange company, for seventeen months. Harrison described his days with the U.S. exchange in a 49-part Twitter thread that goes into great detail. Initially, Harrison was excited to join the company, but over time, his relationship with the company’s CEO, Sam Bankman-Fried (SBF), deteriorated due to disputes over management practices.

“Six months into my time at the company, pronounced cracks began to form in my own relationship with Sam,” Harrison said. “Around then I began advocating strongly for establishing separation and independence for the executive, legal, and developer teams of FTX US, and Sam disagreed.”

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The former president of FTX US Brett Harrison (pictured above) left FTX on Sept. 27, 2022.

Despite facing immense pressure, Harrison persisted in disagreeing with the CEO of FTX, whose sway over various industries was both pervasive and unyielding. Harrison said others at FTX US shared his dissent towards the CEO and his inner circle, as he remarked that it was a team of seasoned professionals from reputable firms in U.S. finance, law, and regulated exchanges.

“Our collective experience and professional acumen were frequently treated as though they were irrelevant and valueless. It was extremely frustrating for all of us,” Harrison insisted. Harrison added:

Sam was uncomfortable with conflict. He responded at times with dysregulated hostility, at times with gaslighting and manipulation, but ultimately chose to isolate me from communication on key decision-making.

Harrison Resigned From FTX on Sept. 27, 2022, After Attempts to Address Organizational Problems at the Company

Ultimately Harrison decided to leave the company and founded his own firm because he felt that the “dream job” of working at FTX US was not worth it due to the deterioration of the relationship with SBF. Harrison said SBF’s behavior and decisions were influenced by insecurity and volatility in temperament.

In early April 2022, Harrison made a final attempt to address the organizational problems at FTX US by making a formal complaint. In response, he was threatened with being fired and having his professional reputation destroyed by Bankman-Fried if he did not retract his complaint and apologize. This event solidified Harrison’s decision to leave the company. He wanted to ensure that the company was well-positioned for success after his departure, so he left the company in an orderly manner.

1/ An announcement: I’m stepping down as President of @FTX_Official. Over the next few months I’ll be transferring my responsibilities and moving into an advisory role at the company.

— Brett Harrison (@BrettHarrison88) September 27, 2022

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“So I gradually wound down, finished building and releasing the US stock brokerage, and saw FTX US employees through their mid-year reviews,” Harrison said. “I never could have guessed that underlying these kinds of issues … which I’d seen at other more mature firms in my career and believed not to be fatal to business success … was multi-billion-dollar fraud,” Harrison remarked.

Harrison added that he has received apologies from many people who are aware that he had no involvement in the criminal scheme. He has learned a lot about the industry over the last few months, some people treated him differently, while some offered sympathy and support. He also mentions that it will be difficult to forget the frenzied and baseless accusations leveled against him on social media.

When Harrison left FTX US last year, SBF told Bloomberg that the executive’s departure had been in the works for “a little while.” The news outlet also asked SBF about his own succession plans, and the FTX CEO said at the time that he had no plans to leave FTX and he would be there “for the long term.”

Tags in this story

Accusations, Apology, Brett Harrison, ceo, citadel securities, crypto exchange, destroyed, deterioration, Disputes, dream job, Experience, fired, formal complaint, founded, Fraud, FTX Bankruptcy, FTX collapse, FTX.US, industry, insecurity, Insight, Jane Street, Management, organizational issues, President, professional reputation, relationship, Resignation, Sam Bankman-Fried, sbf, Social Media, support, sympathy, temperament, threatened, Twitter thread, volatility

What are your thoughts on Harrison’s experience at FTX US? Let us know what you think about this subject in the comments section below.

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Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

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Bitso

Brazilians Turn To Stablecoins As Alternative To US Dollar For Hedge Against Volatility

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Brazilians Turn To Stablecoins As Alternative To US Dollar For Hedge Against Volatility

Brazilians are turning to stablecoins as a way of shielding themselves from the volatility of economic circumstances. This is happening now in the wake of the inauguration of the new government of Luis Inacio “Lula” Da Silva. According to statements coming from exchange executives, the trading volumes of stablecoins have soared in 2022, especially during the last two months of the year.

Brazilians Harness Stablecoins as Dollar Replacement

The popularity of stablecoins in Brazil is soaring as investors and companies are looking to take refuge in the U.S. dollar to hedge against the volatility of the asset market. Executives from several exchanges have declared that demand for stablecoins has skyrocketed during 2022, and exploded during the last months of the year.

Jose Artur Ribeiro, CEO of Coinext, a national exchange, told local newspaper O’Globo about the benefits that using stablecoins presents, versus using dollars in bank accounts. He stated:

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Stablecoins do not pay an administration or performance fee. Those who know how to manage money prefer to leave management to themselves. And the stablecoin has an absolutely liquid market that works 24 hours a day reflecting the market price.

Thales Freitas, CEO of Bitso in the country, indicated that the volume of stablecoin trading grew by 85% in 2022 and that the platform has observed greater interest of Brazilians for these cryptocurrency assets. He explains that small and medium-sized companies, and individuals going abroad, are the ones fueling the demand for stablecoins.

Tether’s USDT Among the Preferred Coins

Ribeiro added that USDT, the dollar-pegged stablecoin issued by Tether, was one of the assets that recorded a significant increase in its trading volumes after the latest general ballot. The volume of orders executed grew from 877.5 million in October to 2.381 billion in December, almost tripling.

USDT has been consistently ranking at the top among cryptocurrency assets in regards to moving value, according to numbers released by the Brazilian Tax Authority (RFB), which receives reports of transactions made by national exchanges.

For example, more than $1.4 billion was moved using USDT across 79,836 operations in August. In October, almost $1.8 billion was transacted using USDT in 119,366 operations.

Third-party companies have made efforts to integrate USDT with the traditional payment system in Brazil. In October, Smartpay, a crypto tech company, partnered with Tecban, an ATM provider, to make Tether’s USDT available at 24,000 ATMs across Brazil.

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Bitso, Brazilians, coinext, Dollars, hedge, Jose Artur Ribeiro, O’Globo, smartpay, Stablecoins, tecban, Tether, Thales Freitas, USDT, volatility

What do you think about the interest that Brazilians have in stablecoins? Tell us in the comment section below.

Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Bitcoin

Bearish Indicator: Bitcoin Volatility Hits All-Time Low

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Bearish Indicator: Bitcoin Volatility Hits All-Time Low

Bitcoin volatility has been on a decline since the start of December. This has been a culmination of both low interest from investors, as well as the declining prices of digital assets in the market. It has not led bitcoin to record its lowest volatility level on record yet.

Will Clemente shared a chart on Sunday that showed that bitcoin volatility had fallen to an all-time low. The chart itself is interesting in the fact that it shows just how the bitcoin volatility had been moving over the last few months.

There were multiple spikes in volatility from the start to the middle of the year 2022. However, toward the end, volatility dives off a cliff and continues this downtrend at this time. Keep in mind that the volatility of an asset is basically how much the price in dollars moved up and down in a given period. The larger the movement in price, the higher the volatility of a coin.

Given that the price of bitcoin has been more or less steady over the last few months, it tracks that the volatility would be lower. Then in December, the price of bitcoin had mainly revolved around the $16,000 level, causing volatility to decline.

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Bitcoin has barely moved price-wise in the last 7 days, up only 0.56% in this one-week period. It is the lowest that volatility has ever been, and while it would normally paint a bullish picture for the digital asset, it has invigorated the bears.

BTC stalls at $16,800 | Source: BTCUSD on TradingView.com

Not A Good Time For BTC

Now, more often than not, when volatility falls to such low levels, it has been right before a bull market where prices had recovered sharply. However, the timing of these have also mattered greatly because it is what determines whether low volatility is bearish or bullish. 

One of the times when low volatility had been very bearish was back in 2018. Like now, the market had just come out of an explosive bull rally that saw bitcoin hit new all-time highs. But with such low momentum, it had caused the price to crash a further 50%.

Given the similarities of both situations, it is likely that this will go as it did in 2018 compared to when volatility hit a low in 2020. The bitcoin bottom is likely not in too, which lends credence to this bearish case, although the decline may not be as high as 50%. This chart posted by Twitter user @DrahoslavP puts in perspective just how volatility has affected the price of the digital asset.

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Every time volatility fell below value “1” it was followed by bullish rally with one exception – october 2018. pic.twitter.com/pzW1GCAr40

— Data Patron (@DrahoslavP) December 25, 2022

Nevertheless, it is not all bad news for bitcoin. In fact, looking over the long term, it is important for this to happen. Right after the low volatility and eventual decline in 2018, bitcoin marked the bottom of the bear market. This had given way to the recovery that would set the pace for the next bull market.

In other words, if a decline follows the current volatility trend, then it may present the best opportunity for investors to get into the digital asset. For BTC bottom chasers, this could be the holy grail of bottom indicators.

Featured image from CoinDesk, chart from TradingView.com

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