Key Takeaways
- $10B in Bitcoin and Ether options set to expire on Deribit.
- Over 25% of options will expire “in the money,” boosting market interest.
- Traders expect bullish trends for Bitcoin and Ether post-expiry.
What Happened?
This Friday at 08:00 UTC, Bitcoin options worth $6.68 billion and Ether options worth $3.5 billion will expire on Deribit, the leading crypto derivatives exchange. This expiry represents over 40% of the total open interest in Deribit’s options market, which currently stands at over $23 billion.
With more than 25% of these options set to expire “in the money,” investors anticipate significant market movements. As Luuk Strijers, CEO of Deribit, stated, “The total notional size of the expiry is over $10 billion.”
Why It Matters?
This significant expiry could trigger a surge in market volatility. Large quarterly expiries often lead to increased trading volumes and the closing or rollover of positions, making prices more unpredictable. Bitcoin has already dropped nearly 9% this month, pulling Ether down by almost 10%.
Strijers pointed out that this decline was due to miner sales, pressure from German-seized BTC, and the expected transfer of Mt. Gox coins. Despite this, the call-put skews indicate that investors are willing to pay a higher premium for calls, suggesting bullish sentiment.
What’s Next?
Looking ahead, traders are optimistic about a positive shift for Bitcoin by July 12 and Ether by July 5. The anticipation of trading in the ETH ETF starting in the first week of July adds to this bullish outlook. This upcoming expiry and the potential market reactions provide a crucial opportunity for investors to reassess their positions and strategies.
