Vladimir Vladimirov
With crypto rallying in the past month, investors have piled into cryptocurrency options. Bitcoin (BTC-USD) options trading volume has hit a record high ahead of Friday’s end-of-month, quarter, and year expiry date, according to The Block data.
Monthly options trading volume for bitcoin reached over $38B across major crypto derivatives exchanges, including $26.7B in BTC options trading volume on Deribit and an increase in derivatives trading on OKX and Binance, The Block said on Thursday.
About $7.7B of options associated with bitcoin (BTC-USD) will expire on Deribit on Friday. Most of the contracts outstanding on the exchange are calls, which gives the holder the right, but not the obligation, to buy bitcoin at a set price.
There’s a total of more than $11B in combined bitcoin and ether (ETH-USD) options open interest ahead of Friday’s expiry, Deribit Chief Commercial Officer Luuk Strijers told The Block, marking the exchange’s largest expiry so far. Almost $5B of them will expire in the money, he said.
“Beyond hedging we also see clients rolling positions to 2024 expiries and expect to see more of that closer to the expiry as well as afterwards,” Strijers said.
The majority of bitcoin calls expiring on Friday have a strike price of $45K. However, at Friday midday, the world’s largest token by market cap was trading at ~$41.9K, down from its 52-week high of $44.7K reached earlier in December.
Bitcoin (BTC-USD) has been gaining since mid-October on rising hopes that the Securities and Exchange Commission will finally approve an exchange-traded fund that invests directly in bitcoin.
The SEC has until Jan. 10 to make a decision on ARK Invest’s spot bitcoin ETF and until Jan. 25 for Grayscale’s proposal to convert the Grayscale Bitcoin Trust (OTC:GBTC) to an ETF.
Others that have filed for bitcoin ETFs include WisdomTree (WT), Invesco (IVZ), BlackRock (BLK), and Valkyrie.