The most popular cryptocurrency, Bitcoin is up for a wild ride this week. This is because BTC’s options are about to expire near the close of the month. This happens while the cryptocurrency is already on track for an institution-led bullish trend.
The prospects seem topsy-turvy as the month comes to an end. Several investors use these BTC options to safeguard their positions in the market, this time the situation might turn out to be riskier as a huge amount of BTC options are nearing expiration in a week’s time.
Record Bitcoin Options To Expire This Week
According to the latest sources, approximately 120,300 contracts are set to expire by the end of this week. The total worth of these contracts currently stands at $4 billion. Most of these contracts are registered under major exchanges like Deribit, Bakt, CME, LedgerX, OKEx and so on. According to the official data from Deribit, the largest crypto exchange platform, this is a record high in terms of the expiry of monthly BTC options.
Options in the crypto market rarely impacts the spot price directly. But the scenario is different in the case of Bitcoins. When it comes to this leading coin, the open interest gets concentrated in the put options and OTM calls. The sudden expiry of the options pushes the Bitcoin market to shield any underlying crypto assets. This is the main reason for more potential turbulence in the price of Bitcoins this week.
Digital assets quantitative analysts are of the opinion that this turbulence will hit stronger than expected if the price of this major cryptocurrency aggressively surges within the upcoming week. This will push market players to hedge their assets. This will, in turn, lead to exposures in the OTM short call options which will increase volatility in the market, according to experts.