Bitcoin (BTC) has fallen sharply in the bear market, and big traders are also noticing that. They often try to reduce their risks with special financial contracts, such as options. A record number of these contracts are now open. That can have major consequences.
record on BTC options
CryptoSlate writes in an analysis that there are now about 345,000 bitcoins tied up in options contracts. Right now it’s worth about $8 billion. This is also called open interestswhich in this case means the amount of tokens investors will earn if their options expire favorably.
The data comes from the analysis service Glassnode. The 345,000 BTC is a record by far. The previous record was set just before the crash caused by FTX. Nevertheless, the outstanding volume measured in dollars is still not too bad. The bitcoin price is down nearly 70% since the all-time high in 2021. Glassnode data shows that by the end of 2021, bitcoins in option contracts were worth about twice as much.
The increase is mainly driven by the Chicago Mercantile Exchange (CME), which now holds 14% of the market. Yet the crypto exchange Deribit is according to Coinglass still lord and master in this field. The CME accounts for 50,000 open contracts, but Deribit houses almost 290,000.
Record in options good or bad bitcoin news?
Options have a time limit. If the underlying, in this case bitcoin, is worth less than intended after that time, the contracts are worthless and you as an investor earn nothing.
History shows that there can be many unexpected price movements when many options are open. The ratio of people who expect the price to rise and those who expect it to fall (the put-call ratio) is very important here.
According to Coinglass, a slim majority expects the price to rise to at least $30,000. At the same time, almost as many people are convinced that the price will drop below $21,000. What this will mean only the future can tell.