Cryptocurrency markets are bracing for a significant event with the expiration of over 178,000 Bitcoin options contracts, valued at $7.6 billion, on December 29.
Key Takeaways
- Over 178,000 Bitcoin options contracts, valued at $7.6 billion, are set to expire on December 29, creating a significant year-end event.
- The total value of expiring crypto contracts, including 1.49 million Ethereum contracts worth $3.47 billion, is estimated at $11 billion, reflecting a notable increase from the previous year.
- Deribit is the primary host for Bitcoin contracts, with a put/call ratio of 0.67, indicating 50% more call (long) contracts expiring than puts (shorts).
- The market anticipates potential price movements, with a focus on the $50,000 strike price and a notable interest in the $43,000 max pain point.
$11 Billion Options Expiry Event
As the crypto calendar inches toward the year-end, markets are on edge, anticipating a substantial event with the expiration of more than 178,000 Bitcoin options contracts, valued at $7.6 billion, on December 29.
$BTC $ETH A Big Bitcoin Options Expiry Event Awaits This Friday https://t.co/qF28NvVyp1
— Jim (@Jimdoteth) December 29, 2023
This event is part of a broader scenario, encompassing 1.49 million Ethereum contracts with a notional value of $3.47 billion, bringing the total estimated value of expiring crypto contracts to $11 billion—representing a noteworthy increase from the previous year’s total of $9.8 billion.
Bitcoin Options Landscape
Deribit, a prominent player in the options market, hosts the majority of the Bitcoin contracts. The current batch of options is among the largest of the year, dwarfing recent expiry events. The notional value of these Bitcoin derivatives contracts on Deribit alone is $7.6 billion, with additional contracts expiring on smaller exchanges like CME and OKX.
The put/call ratio for the substantial Deribit slice stands at 0.67, indicating a prevalence of call (long) contracts, outnumbering puts (shorts) by approximately 50%.
Market Maturity and Future Outlook
Greeks Live commented on the significance of this annual delivery day, highlighting that the total of $11 billion surpasses last year’s end total position of $9.8 billion. Despite the usual trend of low volatility towards the end of the year, the imminent Approval of ETFs in January is sustaining overall implied volatility levels.
To Conclude
As crypto markets brace for an $11 billion options expiry event, marked by the expiration of significant Bitcoin and Ethereum contracts, the anticipation of potential price movements is high.
The evolving maturity of the options market throughout the year, coupled with the impending introduction of ETFs in January, adds layers of complexity to year-end dynamics.
