Recently, after rising to a high of US$13,864 during the year, the price of Bitcoin fell below US$13,000 on October 28, but then its price rebounded and returned to more than US$13,000.
As of press time, according to CoinMarketCap data, the price of Bitcoin is $13,131.67. However, the impact of the upcoming Bitcoin option on it is still unknown.
Yesterday, the crypto derivatives exchange Deribit tweeted that the current total open interest in the Bitcoin options market is $2.6 billion, and about $1.9 billion is on the Deribit platform.
Today, there will be a large number of options expiring on Deribit, including 42138 Bitcoin contracts and 176618 Ethereum contracts, with a total nominal value of approximately US$624 million.
In addition, data released by Skew shows that over 62,000 bitcoin options (equivalent to an open interest of US$830 million) will expire today, which makes the market fears spread again.
In the past few weeks, the Bitcoin market has remained turbulent.
Recently, many mainstream financial institutions have poured into the Bitcoin market.
For example, the global payment company PayPal officially launched its bitcoin trading service. Many people showed strong bullish signs, but the price of the digital asset is still fluctuating around $13,000.
On October 27, the open position of Bitcoin options was close to $3.583 million.
This stems from the evolution of positive sentiment in the market and provides traders with opportunities to hedge and lock in profits at existing price levels.
However, if the price of Bitcoin falls before the option expires, traders may fall into an uncertain situation.
Deribit further elaborated on this uncertainty of traders.
As one of the largest Bitcoin options platforms, Deribit has noticed that its term structure is showing an upward trend, which indicates that the long-term yield of Bitcoin options is higher than the short-term yield.
Deribit said that in the election week from October 30 to November 6, in addition to the stock market, the Bitcoin market was also potentially affected by it.
And, this increasing volatility is expected to continue until the end of the quarter.
In addition, given that Deribit’s 7% of its expiring open interest is concentrated on $13,000 bitcoin options, this may determine the next move of the bitcoin market.
But sometimes, these speculations about the expiration of futures and options contracts did not cause a notable event.
For example, on September 25, more than 83,400 bitcoin options expired, but it did not affect the spot value of the digital asset.
Therefore, traders may just want to pay close attention to external events that may cause large fluctuations in the Bitcoin market to protect themselves.
