The cryptocurrency options market is experiencing a significant surge, with the notional open interest in active bitcoin and ether options contracts on Deribit, a leading exchange, soaring to a remarkable $20.64 billion. This impressive figure is quite close to the peak reached on November 9, 2021, when Bitcoin was trading above $66,000, a whopping 90% higher than the current market rate of $34,170. In essence, the current open interest, measured in terms of contract value, significantly surpasses the levels seen in November 2021.
This milestone is noteworthy not only for Deribit but also as a strong indicator of the broader growth in the cryptocurrency options market and the rising interest among traders. Luuk Strijers, the Chief Commercial Officer at Deribit, remarked on this achievement, emphasizing its significance in demonstrating the increasing demand for options in the market. Deribit holds a commanding share, controlling approximately 90% of global cryptocurrency options activity.
In another development, today marks the expiration of BTC and ETH options contracts worth a total of $4.5 billion on Deribit. Such monthly and quarterly settlements are known to inject volatility into the crypto market. It’s worth noting that a substantial portion of the open interest in Bitcoin options is concentrated in in-the-money (ITM) calls, particularly those with strike prices below the current market rate. As Bitcoin made significant gains, rising from $27,000 to $35,000 in the past two weeks, traders flocked to ITM calls, anticipating further market movements. This current expiration event of options contracts worth $4.5 billion could potentially trigger some significant market actions.