Crypto Market Braces for Volatility as $10B in Bitcoin and Ether Options Set to Expire

Crypto Market Expects $10 Billion Volatility in Bitcoin and Ether Options to End

Bitcoin (BTC) options worth $6.68 billion and Ethereum (ETH) options worth $3.5 billion are scheduled to expire this Friday at 08:00 UTC on leading crypto derivatives exchange Deribit. This upcoming expiration represents more than 40% of the current cumulative open interest, which is over $23 billion. Such large expirations with quarterly expirations often result in increased market volatility as increased trading volumes and unwinding or rolling over of positions make prices more unpredictable.

“As we approach Friday’s big quarterly expiration date, potentially impacted by ‘quadruple witchcraft’ and related volatility in the US equity markets, more than 25% of Deribit’s open positions are expiring in-the-money, equating to over $2.7 billion.” According to Luuk Strijers, CEO of Deribit, the size of the maturity is over 10 billion dollars.

More than 25% of open interest expires in the money, indicating that a significant number of derivative contracts are expected to be profitable for their holders at maturity. Bitcoin, the leading cryptocurrency by market cap, has fallen nearly 9% this month and tested sub-$60,000 levels, attracting opportunity hunters. As usual, this selloff impacted the broader market and dragged ether down by around 10%.

Despite the current bearish trend, data from Amberdata shows that investors are willing to pay higher premiums for short-term and long-term calls that offer asymmetric upside compared to puts. This shows that investors are expecting a positive change in the market. BTC is currently trading at $60,958, down 2.24% in the last 24 hours, while ETH is down 1.14% and is hovering around $3,375.