How Does Implied Volatility of an Option Relate to Perceived Security Risk of a Coin?

High perceived security risk, such as the potential for a 51% attack, increases the probability of extreme price movements, both up and down. This increased probability of large moves translates directly into higher implied volatility (IV) for the coin's options.

Therefore, a high IV for a low-difficulty altcoin often reflects the market's assessment of its inherent security vulnerability and the resulting 'tail risk' of a catastrophic price crash.