Keep an eye on the price — $1 billion Bitcoin options are about to expire

Keep an eye on the price — $1 billion Bitcoin options are about to expire
  • Over $1 billion worth of Bitcoin options is set to expire today, which may cause strong volatility.
  • Bitcoin volatility has been down ever since the coin's price recovered, but this event may trigger it again.
  • It is unknown which way the price may go, although the market sentiment seems to be more positive.

Bitcoin (BTC) might see quite a bit of volatility today, as around 114.700 Bitcoin options are set to expire. The total worth of the contracts is $1.06 billion, which is pretty much the largest expiry in crypto history.

With such a massive event being scheduled for today, there is no telling which way the price might go, which, once again, left a lot of room for speculation.

A record value of options contracts

The number of contracts, and the total amount that they represent, is truly a new milestone for Bitcoin. Only two short months ago, the open interest in options exceeding $1 billion did not exist. Today, however, an even bigger amount than that is about to see expiration.

More than anything, this signals a massive interest in crypto options, which is an exciting thing in its own right. However, its impact on the market is what truly sparked the speculation today.

Many market observers have noticed that volatility has been dropping over the past few months. The trigger event seems to have been the so-called Black Thursday, which took place in mid-March. This is when crypto prices crashed due to COVID-19 fears.

Which way will the price go?

However, volatility in the crypto industry has been suppressed in the past, and it never lasted too long. A massive event as today’s expiration might be just the trigger that the crypto industry has been expecting to see. This would mean the return of volatility, although it still remains unclear which way will the price go.

The majority of puts are at $7k and $8k, while the most popular calls are at $10k and $11k. The put-call ratio’s growth would mean that the majority of traders expect the price to go down. However, the ratio has been reducing for days, since last week’s spike. This indicates that the number of traders who expect a price drop is reducing, which is a bullish signal.

By Ali Raza
A journalist, with experience in web journalism and marketing. Ali holds a master's degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications. Raza is the co-founder of 5Gist.com, too, a site dedicated to educating people on 5G technology.
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