Since Christmas, there has been a noticeable increase in cryptocurrency options and futures trading, driven primarily by traditional financial institutions.
This upswing is strongly linked to the expectation of a pivotal decision from U.S. regulatory authorities concerning the endorsement or rejection of exchange-traded funds (ETFs) centered on direct investments in Bitcoin. Recent information disclosed by Bloomberg indicates record-breaking levels of Bitcoin options trading. Deribit, a prominent platform in the crypto-options industry, is approaching its most substantial quarterly options expiration scheduled for this Friday.
The expiring options, valued at around $11 billion, include $7.7 billion in Bitcoin (BTC) contracts and $3.5 billion in Ether options. Despite being the largest options expiry to date, its expected impact on spot market prices is predicted to be moderate rather than substantial.
The cryptocurrency market has witnessed a significant recovery this year, with Bitcoin’s value surging by almost 160%. This resurgence comes after a turbulent period marked by various industry controversies in 2022, negatively impacting digital asset prices.
The current market rebound is partly driven by optimism about the potential approval of spot Bitcoin ETFs, which could broaden investor participation in this asset category. Options contracts grant buyers the right to buy or sell the underlying asset at a predetermined price within a specified timeframe.
Simultaneously, there has been a rise in trading volumes for both spot Bitcoin and its derivatives, coinciding with the entry of mainstream asset managers like BlackRock into the market, evident from their filings for Bitcoin ETFs. This trend indicates a growing interest and acceptance of cryptocurrencies within traditional financial circles.
