The trading volume for Bitcoin (BTC) options has surged to record levels ahead of an important expiry date this week, signaling increased activity in the derivatives market. Data from The Block’s Data Dashboard shows that the monthly options trading volume for Bitcoin has soared to over $38 billion across major cryptocurrency derivatives exchanges. This includes a significant volume of $26.7 billion in BTC options trading on Deribit, along with a noticeable increase in derivatives trading on OKX and Binance.
The upcoming expiry for Bitcoin options on Deribit is set to see around $7.7 billion worth of options expire, marking a significant milestone for the derivatives exchange. Notably, the majority of outstanding contracts on Deribit are calls, indicating a bullish market sentiment among traders. According to Deribit Chief Commercial Officer Luuk Strijers, there is over $11 billion in combined Bitcoin and Ether options open interest ahead of the expiry, with a substantial portion expected to expire in the money.
In addition to Deribit, the Chicago Mercantile Exchange (CME) has also experienced a surge in Bitcoin options trading volume, reaching an all-time high of $2.39 billion with four days left in the month of December. Open interest on CME bitcoin options has also reached a record high of over $2 billion, further highlighting the heightened activity in the derivatives market.
However, amidst the optimism, there are indications that bullish bets by derivatives traders may be facing challenges. Data from CryptoQuant’s weekly report suggests that sell volume is surpassing buy volume in Bitcoin futures markets, and funding rates for opening long positions in the derivative markets are at their highest level in over a year.
The surge in Bitcoin options trading volume, especially ahead of significant expiry dates, underscores the growing relevance of the derivatives market in the cryptocurrency industry. It also reflects the increasing participation of sophisticated market players in leveraging options and other derivative products for risk management and trading strategies. As the industry continues to evolve, it is essential for market participants to closely monitor and adapt to the dynamics of the derivatives market to effectively navigate the evolving landscape of digital asset trading.
