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According to Deribit, the combined notional open interest in Bitcoin and Ether options listed on the platform has surged to a historic high of $20 billion.
Options worth $4.5 billion expire on Friday. Growing interest in options is a sign of market sophistication.
Options Activity Surges
According to data tracked by Swiss-based Laevitas, the notional open interest of the dollar value locked in active Bitcoin and Ether options contracts on Deribit has risen to a staggering $20.64 billion. This figure mirrors the peak registered on the 9th of November, 2021, when Bitcoin was trading above the $66,000 mark. This is nearly 90% higher than the current rate of $34,170. Simply put, the current open interest in contract terms is considerably higher than in November 2021. The Chief Commercial Officer at Deribit, Luuk Strijers, stated,
“The milestone has been achieved with nearly double the number of outstanding contracts, representing not just a substantial triumph for Deribit but also a clear indicator of the broader market growth and the escalating interest in options among our clients.”
Deribit currently controls 90% of the global crypto options activity. Options are derivatives contracts that give the purchaser the right to buy or sell an underlying asset at a predetermined price on or before a specific date. However, the purchaser is not obligated to buy or sell the asset. A call option gives the right to buy, while a put option offers the right to sell. A call buyer is bullish on the market, while a put buyer is bearish.
What Does This Record Activity Indicate?
The record activity indicates that flows in the options market tied to investors, and market makers will have more say when determining the spot market price. Market makers were set to hold a net short gamma exposure in Bitcoin and may have bought the cryptocurrency as it rose in value to adjust their overall exposure back to neutral. This may have inadvertently accelerated the price rally. Bitcoin’s price has surged over the past couple of weeks, rising above the $34,000 level.
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Author: Amara Khatri
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