Ethereum’s Downside Volatility Risk Higher Than Bitcoin’s After Shanghai Upgrade

On April 26th, it was reported that two weeks after Ethereum completed its Shanghai upgrade, the crypto options market showed that ETH had a higher downside volatility risk than BTC. On Tuesday, options linked to ETH and BTC indicated that investors tend to place bearish bets, providing buyers with protection against price declines. However, the demand for put option in ETH market is stronger than that in BTC market.

Two weeks after the upgrade of Ethereum Shanghai, the bearish sentiment towards ETH in the options market has increased

Introduction

On April 26th, it was reported that two weeks after Ethereum completed its Shanghai upgrade, the crypto options market showed that ETH had a higher downside volatility risk than BTC. This news was a cause of concern for investors who had placed their trust in Ethereum to perform well in the market.

What is Ethereum’s Shanghai Upgrade?

Ethereum’s Shanghai Upgrade was a hard fork that was completed on April 15th, 2021. It was aimed at improving the gas fee structure of the network, making it cheaper for users to perform transactions. The upgrade also introduced the EIP-1559 proposal, which would have reduced the overall supply of ETH, making it more scarce and valuable.
However, after the upgrade was completed, the market did not respond as positively as expected, leading to concerns about Ethereum’s future.

What is Downside Volatility Risk?

Downside Volatility Risk is a measure of the potential downside risk of an asset. It is calculated by looking at the historical price movements of an asset and predicting the likelihood of a significant price drop in the future.

Ethereum’s Higher Downside Volatility Risk

According to reports, after the Shanghai Upgrade was completed, the crypto options market showed that ETH had a higher downside volatility risk than BTC. This news came as a surprise to many investors who had been banking on Ethereum’s success after the upgrade.
On Tuesday, options linked to ETH and BTC indicated that investors tend to place bearish bets, providing buyers with protection against price declines. However, the demand for put option in ETH market is stronger than that in BTC market, indicating that investors are more worried about Ethereum’s price dropping.

What does this mean for Ethereum?

The higher downside volatility risk for Ethereum means that investors are less confident in its future performance. With the demand for put options being higher than that for BTC, it indicates that investors are more worried about Ethereum’s price dropping in the future.
However, it is important to note that this is not a definite indication of Ethereum’s future performance. The market is highly volatile and unpredictable, and it is possible for Ethereum to bounce back and perform well in the future.

Conclusion

Ethereum’s downside volatility risk has increased after the completion of its Shanghai upgrade. This news has raised concerns among investors who are now worried about its future performance. However, it is important to remember that the market is unpredictable, and this is not a definite indication of Ethereum’s future performance.

FAQs

1. What is Ethereum’s Shanghai Upgrade?
– Ethereum’s Shanghai Upgrade was a hard fork completed on April 15th that aimed to improve the gas fee structure of the network and introduce the EIP-1559 proposal.
2. What is downside volatility risk?
– Downside Volatility Risk is a measure of the potential downside risk of an asset.
3. What does higher downside volatility risk mean for Ethereum?
– Higher downside volatility risk indicates that investors are less confident in Ethereum’s future performance and worried about the possibility of its price dropping in the future.