US CPI data release will not lead to a surge in Bitcoin volatility

Tomorrow's US inflation report will be the focus, as investors look for signals on the Fed's interest rate path. A recent series of unexpected events has weakened expectations of a rate cut. However, the pricing of Bitcoin options indicates that traders do not expect a significant increase in volatility after the report is released. Institutional liquidity provider OrBit Markets said, "The market's pricing premium for this event is almost negligible," and noted that the volatility of Bitcoin prices after the CPI report may be less than 2%, with almost no additional volatility, while SP 500 options pricing reflects relatively high volatility. Markus Thielen, founder of 10x Research, has considered Bitcoin options expiring later this week. His analysis is consistent with OrBit's: "The implied volatility of options expiring on May 17 is 52.8%, only 2% higher than other options, which means traders expect moderate volatility to increase after the CPI is released. However, the realized (historical) volatility is still below 50%, which means that expectations of a significant increase or decrease are not reflected in the price."