Bitcoin’s implied volatility has dropped to its lowest point in a year as U.S.-China trade negotiations resumed at Lancaster House in London. The discussions, expected to last at least two days, aim to build on progress made during talks in Geneva last month that helped ease tensions between the two nations.
Despite maintaining a price above $100,000—currently around $108,000—Bitcoin remains range-bound. The cryptocurrency has risen 4.5% over the past month but has yet to break out directionally amid ongoing trade and economic uncertainties.
QCP Capital noted that these geopolitical tensions have prompted immediate market reactions but have not driven significant trends in Bitcoin or the broader crypto market. Bitcoin’s implied volatility, which gauges expected future price fluctuations based on options pricing, has fallen to one-year lows and appears undervalued. Realized volatility remains similarly subdued.
The timing aligns with growing interest in Bitcoin as a neutral reserve asset amid the U.S.-China standoff. Its decentralized nature places it outside government control, which appeals to countries and institutions caught between these major powers. Jakob Kronbichler, CEO of Clearpool, highlighted Bitcoin’s neutrality as a key factor for its long-term appeal.
Dominick John from Kronos Research added that Bitcoin’s design offers a hedge against currency manipulation and geopolitical instability. However, James Bowater of The Digital Commonwealth cautioned that Bitcoin’s volatility, limited liquidity, and regulatory risks restrict its effectiveness as a genuine reserve asset.
Recent U.S. economic data, including the May nonfarm payrolls report, had minimal impact on Bitcoin’s price, which remained steady. QCP Capital observed that without a clear macroeconomic catalyst, Bitcoin shows signs of stagnation.
Meanwhile, the Bitcoin options market favored call options, with open interest and volume weighted at approximately 62%, according to CoinGlass data.