Options for 67,700 Bitcoin (BTC), worth $ 745 million at current prices, will expire tomorrow, according to the crypto data analysis platform. Skew. But experts are divided on whether this will not have an impact or whether it could shake the crypto markets.
Options are a type of financial derivative. They give buyers the right, but not the obligation, to buy assets at a specified price on a set date in the future, so they pay sellers a “premium.” If the price of the asset is higher than the agreed price on the expiration date, buyers can execute the contract and receive a profit, or reject and lose the premium paid.
Depending on whether or not a significant number of traders will decide to buy BTC at specific strike prices, this could push Bitcoin’s market price in either direction.
Nicholas Pelecanos, the chief operating officer of the NEM Venture Fund, said Decipher that crypto markets are certainly attracting more attention lately, both institutional and retail, and the increasing volume of Bitcoin option contracts is a sign of that.
“Open interest in BTC options is currently at its highest level on record. There is potential for some options-related movements around the expiration date, but I can’t see any Big Bear movements on the charts, “Pelecanos said, adding:” The overall bias for BTC options is still very much on the side. upward interest. “
He said that in the long term, the maturity option markets will likely reduce the volatility of the BTC price action, as the large spikes in the price will be limited. However, this could increase the case of Bitcoin as an alternative currency and as store of value.
Mati Greenspan, market analyst and founder of Quantum economyHe also assumed that while such a massive expiration of options probably wouldn’t involve much, “it’s not something we can really prepare for anyway.”
“Could [have a meaningful impact on Bitcoin’s price and volatility] But it is very difficult to anticipate. We have seen many times that large contract maturities have moved the markets in one way or another and many times when nothing happened, ”Greenspan said.
Talking about CME futures in the Decrypt daily Podcast on Tuesday, Bobby Ong, COO of crypto analytics platform CoinGecko, noted that, “Usually in the last week of the month there is generally high price volatility.”
“In the last week of the month there is a big increase in the price, either up or down,” he added.
How Decipher reported, a similar situation occurred in late June when Bitcoin options worth $ 1 billion expired, marking the largest expiration of options to date. That time, the massive expiration of options had no noticeable effect on the crypto market. But considering the wild week Bitcoin is having so far, nothing is out of the question.
