How Does the Cryptocurrency Market’s High Volatility Affect the Time Value of Crypto Options?

The cryptocurrency market's high inherent volatility leads to significantly higher implied volatility (IV) for crypto options compared to traditional assets. This high IV directly inflates the time (extrinsic) value component of the option premium.

Consequently, crypto options are generally more expensive, and while their Theta decay rate is mathematically similar, the amount of premium decaying daily is often higher.