$20 Billion Locked in Bitcoin and Ether Options

• Bitcoin and Ether options listed on Deribit have rallied to new highs amidst rising bullish sentiments.
• The increased interest points to great volatility as options worth $4.5 billion expire on Friday.

Crypto derivatives have seen an uptick in activity in the last couple of weeks. Deribit reports that the combined notional open interest in bitcoin and ether options listed has surpassed $20 billion. This rise to record highs suggests that the crypto market is set to witness greater volatility in the weeks to come. Additionally, it means that the options market tied to investors and market makers will have a greater influence on the spot market price.

Notably, Deribit controls 90 percent of the global crypto options activity. Luuk Strijers, chief commercial officer at Deribit stated in an interview;

The milestone has been achieved with nearly double the number of outstanding contracts, representing not just a substantial triumph for Deribit, but also a clear indicator of the broader market growth and the escalating interest in options among our clients

Options are derivative contracts that give the purchaser the right to buy or sell the underlying asset at a predetermined price. Usually, the call buyer is bullish on the market, while a put buyer is bearish. Deribit reports that options worth $4.5 billion will expire on the platform. Historically, this settlement has triggered volatility in respective tokens.

Ahead of this, Bitcoin is trading at $34,000 after a 1 percent drop in the last 24 hours. Ethereum (ETH) on the other hand, has lost around 3 percent and is trading at $1,780. In the last two weeks, BTC which has led the market for the past two weeks has earned around 30 percent during the same time.

Speaking on the expiry, Strijers states, “Options worth $4.5 billion will expire on Friday. That’s a particularly high value of which an uncommon percentage is set to expire in the money (ITM) due to the recent market move potentially prompting some market action,”

As CNF has reported, there is great optimism around the crypto market which has been showing flashes of this for the past two weeks. According to Matrixport, the fifth bull market has already begun and will culminate in a new all-time high of $125,000 by December 2024. This rally will primarily be driven by the upcoming Bitcoin halving expected in April 2024 as well as institutional adoption driven by the launch of the first Bitcoin spot ETF.

Read More: Matrixport Predicts Bitcoin to Skyrocket to $125,000: Fifth Bull Market Is Here

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