Bybit X Block Scholes options volatility report (May 2025): ETH-BTC volatility reaches a five-year high as ETH plays catch-up

Key Highlights:

Our monthly report delves into insights from options volatility to inspire your next crypto move.

In May 2025, ETH options exhibited historically high volatility premiums compared to BTC, driven by ETH's elevated realized volatility during a significant price rally. The ETH-to-BTC implied volatility ratio hit a nearly five-year peak, exceeding 2x for short-dated options.

This extreme ratio emerged as BTC's realized volatility dropped to unexpected lows, breaking a long-standing floor and highlighting the divergence in the options markets.

The volatility term structure for ETH and BTC diverged sharply, with ETH showing persistent inversion — shorter-dated options priced higher than longer-dated ones — indicating immediate market uncertainty, while BTC’s structure remained flat.