The crypto market is experiencing a downturn, with Bitcoin and Ether prices dropping, but some experts see opportunities in the cheap volatility. Meanwhile, a $75 million raise by Fomo shows that big venture capitalists are still betting on consumer crypto.
What Happened
The crypto market fell on Tuesday, with Bitcoin trading at $62,300, having lost 2.5% since midnight UTC, while Ether tumbled by more than 4% to $1,650. The selloff follows Monday's downturn in technology stocks, with another day in the red foreshadowed by Nasdaq 100 futures, which have cratered by 2.5% since midnight.
Why It Matters
The cheap volatility in Bitcoin options is seen as a buying opportunity by some experts. Jean-David Péquignot, chief commercial officer at Deribit, told CoinDesk that "vol is cheap relative to its own history but no longer at fire-sale levels." This means that traders are pricing in smaller price swings for the largest cryptocurrency than they have for most of the past year.
What Experts Say
"Absent a decisive catalyst the path of least resistance is range-trading driven by positioning and flows rather than fresh spot demand." — Can-Luca Köymen, investment strategist at Sygnum
"Markets often spend extended periods consolidating before a catalyst emerges, and that catalyst is frequently something investors weren't focused on beforehand." — Angie Malltezi, chief operating officer of Altius
Key Numbers
- **41.5%: Deribit's bitcoin volatility index, DVOL, which measures the annualized 30-day expected, or implied, volatility.
- **2.5%: The drop in Bitcoin price since midnight UTC.
Key Facts
- Who: Fomo
- What: Raised $75 million in funding
- Impact: Shows VC confidence in consumer crypto
Background
The oil scare that drove energy to account for more than 60% of May's CPI increase has not yet been reflected in the data. Experts expect the first real inflection point to be late in the third quarter.
What Comes Next
The crypto market is expected to continue its range-trading driven by positioning and flows rather than fresh spot demand. However, the cheap volatility in Bitcoin options presents a buying opportunity for some experts.