The $3.7 Billion in Bitcoin Options Expires on January 29 with the Growing Interest in Cryptocurrencies

Bitcoin’s record of $3.7 billion worth is likely to expire on January 29 as speculation inclines up after the current volatility in the price of cryptocurrency and growth in interest under its derivatives. 

As per reports, the value of open contracts was approximately 245,700 Bitcoin, or about $9.1 billion on Monday morning. Bitcoin options refer to the contracts that provide investors with the right and not the obligation to sell or purchase the crypto at a particular cost in a stipulated time period. Moreover, they provide investors with a possibility to earn money by betting on where the prices are about to reach, without requiring to indulge in digital currency trading. 

In 2018, an exchange started offering the products, which is also presently facilitating the maximum Bitcoin options trading. However, with Bitcoin’s price surges, the interest has increased sharply over the previous months when the amount reached its all-time high about $42,000 earlier in January. On Monday morning, the price stood at approximately $36,960. 

Also Read: Bitcoin’s Price Could Rise $45K Due To Institutional Investment. What Happens When They Sell?

What Do the Anticipations Reveal?

Options contracts worth approximately 101,000 Bitcoin or $3.7 billion as per the prices of Monday are likely to expire on 29th January 2021 as per reports, although not all options will end up in a trade. It happens to be higher than the earlier record of approximately $2.4 billion observed on 25th December, as remarked by analysts. The choices reveal that critics are bullish regarding Bitcoin. Concerning Monday, the public interest in “calls” was notably bigger as compared to the open interest in “puts.” “It reveals simply how volatile Bitcoin has become, equivalent by its criteria, over a previous couple of months. 

The moves analysts are witnessing regularly presently, are incredible therefore it is apparent that options are being used. The price of Bitcoin has witnessed a major surge higher than 300 % over the last year and higher than 60% in the last month. According to Crypto analysts, governments and Central banks are flooding the economy with cash within the worldwide pandemic acting as a key driver, thereby keeping aside the worries of currency devaluation and inflation. Despite that Bitcoin’s price happens to be highly volatile daily swinging more than 10%. After Bitcoin’s price reached a record high of more than $41000 dollars on 8th January 2021, it was approximately close to $30,000 after a few days before it spiked again. 

Also Read: 2020’s Crypto Performances: The Year in a Review

On the Part of the Investors

Looking forward to getting themselves involved in the action, investors have invested in products that provide them with exposure to Bitcoin and other cryptocurrencies. Various Crypto exchanges have witnessed huge trading volumes per day on an average as compared to the last year. Owing to that, the Bitcoin Trust of Grayscale has also boomed. Apart from that options have turned out to become a popular method of anticipating Bitcoin. The market of cryptocurrency has been guided by familiar investors and because of the complexity in trading, the volumes of options provide a good indication of the number of investors that have been trading Bitcoin successfully. 

Institutional Bitcoin Adoption

Institutional Bitcoin adoption is likely to drive the preceding underlying growth for options and futures volumes. However, people are pretty skeptical regarding the rise in options. The option and creation of such instruments happen to be one step forward however does not take away the speculative nature of the instrument. Overall, according to analysts, Bitcoin might require to break the $40,000 mark again in the near future providing the price does not rise more. If Bitcoin does not happen to pick up soon then the momentum funds, that are following the trends, might force the price to go lower.