Deribit, the leading cryptocurrency options economy, is getting ready for a week that has never been seen before. Options worth more than $15 billion will expire, spanning both Bitcoin and Ethereum.
Deribit says that this week’s termination will be significant in the history of the exchange because over $15 billion in options notional open interest (OI) is set to expire. Friday is likely to be one of the most active days for termination events on the site for options contracts.
Crypto High Stakes Options Expiry
There is a total of $26.3 billion in open interest, with $9.5 billion in Bitcoin options and $5.7 billion in Ethereum options. These two types of options make up 40% and 43% of the total OI, respectively.
Deribit additionally addressed about how current market conditions affect these expirations. He said that if the purchase level hits $70,000, about $3.9 billion in Bitcoin options and $2.6 billion in Ethereum options will end in the money.
These numbers are much higher than usual because the prices of both cryptocurrencies have recently gone up. This is likely to cause the base assets to go up in value because of longer in-the-money (ITM) expirations and less impact from lower max pain levels.
Deribit saw a contango in the volatility appear for both Bitcoin and Ethereum when he looked at market volatility. The implied volatility (IV) levels for March 29 options are currently 63% and 67%, but they are projected to rise to a healthier 80% further down the curve. Based on this finding, it seems that people in the market don’t expect big price changes until expiration.
Along with options, around $465 million in Bitcoin March Futures and $230 million in March Ethereum Futures are set to end. Together, these amounts add up to about $695 million of the $1.9 billion that is still outstanding.
Deribit also talked about the significant amount of open interest in its dated futures, saying that the current OI of $1.9 billion is the highest in any cryptocurrency market and is caused by an annualized basis of about 15% to 20%.
The substantial gains that have sparked a lot of interest have made people very excited about the trading that will happen around the expiration date.
