Bitcoin on the Verge of a Big $ 6 billion Boom
Now, as Bitcoin traders and investors look for signs of what might be moving the market, the record value of Bitcoin options worth nearly $ 6 billion expires this Friday, March 26.
The market is waiting for an outcome
Bitcoin options contracts, which allow investors to buy or sell cryptocurrency at a specified price for a set period of time, worth about 100,000 Bitcoins, or nearly $ 6 billion at today’s prices, expire on Friday, according to cryptocurrency analytics provider Bybt. This approaching option expiration date is well above the previous record of $ 4 billion set at the end of January.
“The expiration data suggests an optimistic outlook,” says Pankaj Balani, chief executive of Singapore-based cryptocurrency exchange Delta.
Trading data shows that crypto traders are optimistic about Bitcoin ahead of its record-breaking expiration date. Currently, there is more open interest in “call options”(bets that the price of BTC will rise) than in” puts ” (bets that the price will fall).
“Open interest on puts is growing more than on calls, as option writers prefer to sell the downside rather than write at the top,” says Balani. “On the other hand, the largest accumulation occurs on strikes for $ 40,000 by the end of the march. $ 40,000 also remains the best-selling strike for the June maturity, and with longer maturities.”
Elon Musk, the Tesla billionaire and most recently an active Bitcoin proponent, raised eyebrows among investors when he added a $ 1.5 billion crypto coin to the balance sheet of his electric car company last month, buying it for about $ 40,000 per Bitcoin.
“$40,000 has become a strong psychological level for traders, as it is the level at which Bitcoin has risen significantly since the news of Elon Musk’s $ 1.5 billion purchase, ” says Balani.
A new wave of volatility
“Although most of this open interest has outgrown, a significant portion is still open, with only three days left before the deadline. This creates a small risk of volatility for the market. If the futures premium is reduced, we will see a reduction in transferable trading, which may increase the short-term volatility of Bitcoin before it expires.”
A new wave of volatility
The looming record expiration of Bitcoin options could trigger a wave of price volatility, as previous major expiration dates have caught the attention of investors. The size of the open interest market for Bitcoin has also surged recently, more than doubling since last summer.
The recent price boom for the king of cryptocurrencies, which has doubled since the start of 2021, has been driven by rising institutional adoption on Wall Street, corporate interest led by Tesla and MicroStrategy, and a wave of retail traders keen not to miss the rally.
The Bitcoin price is now in the range of $ 54,305 per coin, having settled just below the psychological level, and everyone is waiting for further price movements of the BTC.