How Does Volatility Affect the Premium Received by the Option Writer?

Higher volatility in the underlying cryptocurrency increases the option premium for both calls and puts, as it increases the probability that the option will end up 'in-the-money.' Therefore, the option writer (seller) receives a higher premium in a high-volatility environment. While this increases the immediate revenue, it also increases the potential for the option to be exercised, raising the risk for the writer.