The options trading market for cryptocurrencies has witnessed a significant surge, illustrated by the impressive achievement of $15 billion in Bitcoin (BTC) options on Deribit last week. Deribit has firmly established its dominance in the BTC options arena, commanding an impressive 87% market share.
This surge, which signifies a significant increase since late September, indicates the traders’ growing preference for bullish exposure in the crypto market.
Record-Breaking Surge in Bitcoin Options Open Interest
On Friday, the notional open interest, which measures the U.S. dollar value in active Bitcoin options contracts, reached a remarkable milestone.
The metric surged to a high of $15 billion, marking a new record. Since late September, the numbers have more than doubled, surpassing the previous peak of $14.36 billion reached during the bull-market period in October 2021, when BTC was trading above $60,000.
As of the time of writing, the open interest for Bitcoin options is approximately $14.02 billion, based on data from the Deribit exchange.
A rise in open interest indicates a liquid market with numerous participants, reflecting heightened activity by sophisticated traders creating new options contracts. Although increased open interest suggests greater interest and market activity, it doesn’t reveal the market direction or prevailing sentiment, whether bullish or bearish.
Luuk Strijers, Chief Commercial Officer at Deribit, expressed his excitement, stating, “We’re excited to announce that we’ve just achieved a record-breaking $15 billion (ATH) in notional open interest in BTC options.” He also highlighted the growing preference for options as a strategic tool among traders, leveraging recent spikes in implied volatility for positioning, hedging, or leveraging.
Options representing the right to buy (call option) or sell (put option) BTC at a set price within a specified time have become increasingly popular in sophisticated trading strategies, with call options becoming the preferred choice for investors seeking to leverage BTC’s upward potential.
BTC Options Market Surpasses BTC Futures Market
In a related development, the open interest in the BTC options market has recently exceeded that of the BTC futures market. As per data from Coinglass, the active options contracts currently stand at an impressive $17.94 billion, surpassing the futures market’s $16.69 billion.
This shift is seen as a maturation of the market, reflecting a growing preference for options in strategic positioning, hedging, and responding to implied volatility.
Luuk Strijers sees this as a sign of market sophistication, highlighting the need for traders to factor in settlement impacts and market makers’ hedging activities on spot prices in the evolving landscape.
Meanwhile, the ether options market also saw a notable increase in notional open interest to $6.83 billion, although still below the record $8 billion in September 2022, when Ethereum transitioned to a proof-of-stake consensus mechanism.
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