Bitcoin options expire: volatility expected over Christmas

23. Dezember 2020

Many Bitcoin futures expire on Friday.

Bitcoin futures worth around $ 2.3 billion will expire on Christmas Day. This means that the cryptocurrency market can prepare for a volatile week.

In a tweet on Monday , crypto data provider Skew reported that 102,200 Bitcoin ( BTC ) options will expire on Friday.

Options contracts allow holders to buy or sell Bitcoin Revolution reviews at a specific rate. Friday’s phasing out date has notable clusters around $ 15,000 and $ 20,000, according to Skew.

Expiry of BTC options according to Skew

The expiration date of bitcoin options contracts is widely regarded as a volatile event for the largest cryptocurrency. Because as the expiration date approaches, holders adjust their contracts . Traders who are up can also choose to cash out and sell the cryptocurrency.

BTC options expiry on Friday, according to Skew

Such events usually lead to large fluctuations in the Bitcoin price. Typically, the impact of a contract on the BTC rate becomes more noticeable about a day or two before it expires.

Crypto derivatives trading has skyrocketed this year as more traders and institutional investors want to deal with Bitcoin. Since last week, the crypto derivatives platform Deribit has been offering Bitcoin futures with a strike price of 100,000 US dollars , which expire on September 24, 2021. Bitcoin enthusiasts who believe that the cryptocurrency will reach a six-digit rate can now make this bet on the futures market.

Bitcoin is currently in a bull market fueled in part by institutional investors and large over-the-counter deals. Even with the expected futures volatility, it is entirely possible that Bitcoin will continue to receive good support. For example, due to institutional demand and the rise in so-called illiquid wallets, i.e. addresses that have sent less than 25 percent of the BTC they have ever received. Chainanalysis believes that 77 percent of the 14.8 million BTC mined that are not yet lost are in illiquid wallets.