Record Levels of Bitcoin Options Open Interest for March Expiry on Deribit

Bitcoin Futures

Deribit, a leading cryptocurrency derivatives exchange, is poised to witness historically high levels of bitcoin options open interest expiring this Friday. The surge in open interest, totaling over $9.5 billion, reflects increased liquidity and participation in the market.

According to analysts at Deribit, this end-of-month expiry represents one of the largest in the exchange’s history, accounting for approximately 40% of the total open interest. Comparatively, previous end-of-month expiries in January and February stood at significantly lower levels, around $3.74 billion and $3.72 billion, respectively.

A notable aspect of this expiry is the considerable portion of options set to expire in the money, amounting to $3.9 billion based on a current spot price of around $70,000. This suggests that a substantial number of options contracts hold value at current market prices, potentially leading to increased buying activity as traders seek to hedge or capitalize on further price movements.

Deribit analysts anticipate heightened volatility or upward pressure on bitcoin prices as option holders exercise their profitable contracts. The recent price rally in Bitcoin has contributed to this situation, resulting in higher levels of in-the-money expiries compared to typical scenarios.

Luuk Strijers, Chief Commercial Officer at Deribit, emphasized the bullish sentiment prevailing in the cryptocurrency market, particularly evident in derivatives data. Strijers highlighted the basis yield achievable by buying spot and selling longer-dated futures, indicating strong demand in the market.

Moreover, Strijers noted a significant increase in Bitcoin notional open interest in contracts valued at $100,000 and higher on Deribit. He also pointed out a shift in the put-call ratio for ether options, indicating evolving market sentiment towards short-term and long-term expiries.

Overall, the heightened levels of bitcoin options open interest on Deribit reflect the growing maturity and sophistication of the cryptocurrency derivatives market, underpinned by bullish market sentiment and evolving trader strategies.

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