Bitcoin and Ether Options Trading Reaches Record Highs of $20 Billion Amid ETF Excitement According to Deribit, options valued at $4.5 billion are scheduled to expire this Friday.
The total value of open positions for bitcoin and ether options on Deribit has exceeded $20 billion. The growing interest in options indicates a more sophisticated market. Deribit is set to settle monthly bitcoin and ether options worth several billion dollars on Friday.
The current notional open interest, which reflects the dollar value locked in active bitcoin and ether options contracts, has reached $20.64 billion. This is nearly on par with the peak seen in November 2021 when bitcoin was trading above $66,000, significantly higher than the current market rate of $34,170. This surge in open interest signifies a substantial triumph for Deribit and underscores the broader market growth and rising interest in options among their clients, as mentioned by Luuk Strijers, chief commercial officer at Deribit. Notably, Deribit controls 90% of the global crypto options activity.
Options, in essence, provide the purchaser the right, but not the obligation, to buy or sell the underlying asset at a predetermined price on or before a specific date. Call options express a bullish sentiment, while put options suggest a bearish outlook on the market.
The heightened options activity implies that investors and market makers trading in this space will wield significant influence over determining the spot market price. Recent reports suggest that market makers currently hold a net short gamma exposure in bitcoin, prompting them to buy the leading cryptocurrency as it surged, consequently influencing the price rally. In the last two weeks, BTC has climbed 30% to trade above $34,000.
Additionally, the expiring BTC and ETH options contracts worth $4.5 billion later today, at 08:00 UTC, are expected to inject volatility into the crypto market, a common phenomenon during monthly and quarterly settlements.
It’s worth noting that most of the open interest lies in call options at strike prices lower than the current market price of bitcoin. This trend indicates that traders have been acquiring calls in anticipation of price increases, particularly over the past two weeks as bitcoin’s value surged from $27,000 to $35,000.
As a result, options worth $4.5 billion are set to expire on Friday, with a significant portion expected to be in the money due to recent market movements, potentially prompting further market action, as highlighted by Strijers.
