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Cryptocurrency market braces for volatility as $10 billion options in Bitcoin and Ether are set to expire
Cryptocurrency market braces for volatility as $10 billion options in Bitcoin and Ether are set to expire
Bitcoin (BTC) options worth $6.68 billion and Ethereum (ETH) options worth $3.5 billion will expire on Deribit, the leading crypto derivatives exchange, this Friday at 8:00 UTC. This impending maturity represents more than 40% of the current cumulative open interest, which amounts to more than $23 billion. Such large quarterly expiries often lead to heightened market volatility, as increased trading volumes and the liquidation or rollover of positions make prices more unpredictable.
“As we approach Friday’s large quarterly expiration, potentially impacted by ‘quadruple witching’ and related volatility in US equity markets, more than 25% of Deribit’s open interest will expire in-the-money, equating to more than 2.7 billion dollars. The total notional value of the maturity amount exceeds 10 billion dollars,” second to Luuk Strijers, CEO of Deribit.
Having more than 25% of open interest set to expire in the money suggests that a significant number of derivative contracts are expected to be profitable to their holders upon maturity. Bitcoin, the leading cryptocurrency by market value, has fallen nearly 9% this month, testing levels below $60,000, attracting bargain hunters. As usual, this sell-off impacted the broader market, sending Ether down nearly 10%.
Despite the current bearish sentiment, Amberdata data indicates that investors are willing to pay a higher premium for short- and long-term calls, which offer asymmetric upside, compared to puts. This suggests that traders are anticipating a positive change in the market. BTC is currently trading at $60,958, down 2.24% in the last 24 hours, while ETH is down 1.14% and hovering around $3,375.