Key Points
- On Friday, Deribit crypto exchange is set to settle Bitcoin and Ethereum options contracts worth $9.5 billion and $5.7 billion, respectively.
- This marks one of the biggest expires in Deribit’s history, the crypto exchange revealed on their X account.
Deribit crypto options exchange prepares for a historic week, as the platform anticipates one of the largest options contract expirations with more than $15 billion in BTC and ETH options involved.
Deribit announced on X platform that tomorrow will go down as one of the biggest expires for the company, and the levels mentioned above are higher than usual which can be seen in the “low Max Pain levels”.
Huge upcoming options expiry (USD 15bn) 🚀🚀🚀
In total over USD 15 billion in options notional OI will expire this week; This Friday marks one of the biggest expiries in Deribit's history as USD 9.5 billion BTC options open interest out of USD 26.3 billion will expire (40%)… pic.twitter.com/1no1Q4SwJT
— Deribit (@DeribitExchange) March 27, 2024
Deribit has noted that the current volatility surface for BTC and ETH shows a contango, and the IV levels for 29MAR options are at 63% and 67%, respectively, while they are expected to reach a healthy 80% for both towards the back end of the curve.
These market conditions suggest that market participants don’t expect significant price swings leading up to the expiration date.
“Furthermore USD 465 million in BTC March Future plus USD 230 million in the March ETH future will expire, approximately USD 700 million of USD 1.9 billion currently outstanding.”
Deribit’s chief commercial officer, Luuk Strijers, has indicated that a significant number of options are due to expire in-the-money (ITM), which could lead to increased market volatility or upward pressure.
He stated that the maximum loss points for the three-month maturity of BTC and ETH are $50,000 and $2,600, respectively.
He also mentioned that although Bitcoin and Ethereum have experienced post-maturity corrections during the last bull market, they are constantly moving towards the maximum loss points to maintain their rallies, resulting in short and low corrections.
Deribit is a cryptocurrency futures and options exchange based in Panama City, Panama. Originally a BTC trading platform, it now offers ETH contracts and plans to add more currency contracts in the future.
High Bitcoin and Ethereum price volatility expected
The latest reports revealed above, along with the race among BTC and ETH ETFs, are expected to trigger high volatility for the two coins in the markets.
Earlier today, we reported that Larry Fink, BlackRock’s CEO, made extremely bullish remarks regarding Bitcoin on Fox Business. He stated that the company’s spot BTC ETF experiences unprecedented growth, which makes it the fastest-growing ETF ever.
He also expressed his optimism regarding the long-term viability of Bitcoin.
🚨 Breaking : Larry Fink, the CEO of investment giant @BlackRock, has just declared their spot #Bitcoin ETF as the fastest growing ETF ever recorded in the industry.
This unprecedented growth marks a significant milestone in the world of cryptocurrencies and #ETFs alike 🔥 pic.twitter.com/CteLjBqIat
— Financial Summit (@FinSummit) March 28, 2024
Ethereum has also been in the spotlight lately, with an ETH ETF looking inevitable as the $4.5 trillion asset management firm Fidelity has just filed an S-1 form for a Spot Ethereum ETF with the SEC, with staking included as well.
Regarding the price of Bitcoin and Ethereum today, BTC is trading above $70k, while ETH remains above the level of $3,500 on CoinMarketCap.