What Is ‘Implied Volatility’ and How Does It Affect Options on Cryptocurrencies?

Implied volatility (IV) is the market's forecast of a cryptocurrency's future price movement, derived from the current prices of its options. High IV suggests the market expects large price swings, making options more expensive because the probability of the option expiring "in-the-money" is higher.

Miners looking to buy protective put options will find them more costly when IV is high, while miners looking to sell covered call options will receive a higher premium.