Bitcoin and Ether Prices React to Deribit’s Large Quarterly Expiry

Impact of $10 Billion Options Expiry on Bitcoin and Ether Prices

Bitcoin and Ether Prices– As discussions swirl around the bustling crypto derivatives market, all eyes are on Friday at 08:00 UTC, when a staggering $6.68 billion in bitcoin (BTC) options and $3.5 billion in ether (ETH) options are set to expire on Deribit, a leading crypto derivatives exchange.

This impending expiry represents a significant portion—over 40%—of the current cumulative open interest totaling more than $23 billion. Such large quarterly expiries typically inject heightened volatility into the market, ushering in unpredictability as trading volumes surge and positions are adjusted.

Potential Effects of ‘Quadruple Witching’ on Cryptocurrency Volatility

With Friday’s approaching quarterly expiry looming large, influenced possibly by ‘quadruple witching’ and concurrent volatility in U.S. stock markets, Deribit’s CEO Luuk Strijers highlighted that over 25% of the exchange’s open interest is poised to expire in-the-money, totaling more than $2.7 billion out of a substantial $10 billion notional size.

Options, fundamental in the derivatives realm, grant holders the right—though not the obligation—to buy (call) or sell (put) underlying assets at predetermined prices by specific dates. On Deribit, each options contract represents either BTC or ETH.

Having such a significant portion of open interest set to expire profitably indicates that many derivative contracts are anticipated to end lucratively for their holders.

Bitcoin, the leading crypto by market value, has seen a recent decline of nearly 9% this month, dipping below $60,000 at one point, as a resulting sell-off has cast a shadow across the broader market, pulling ether down by almost 10%.

The recent price drop stems from miner sell-offs, pressures from German-seized BTC, and the impending transfer of Mt. Gox coins slated for early July, Strijers explained.

Yet, amidst this turbulence, the data shows that investors are showing a stronger preference for near and long-term calls offering asymmetrical upside potential over puts, based on call-put skews tracked by Amberdata.

FAQs

For the latest in crypto updates, keep tabs on Crypto Data Space.