Bitcoin and Ethereum options trading open interest reaches record high of $23 billion | CoinDesk JAPAN

Bitcoin (BTC) and Ethereum (ETH) options trading on the crypto asset (virtual currency) derivatives exchange Deribit is hotter than ever.

As of December 8th, the cumulative dollar value locked in unsettled or unprocessed BTC and ETH option contracts (notional open interest) was an all-time high of $23.6 billion (approximately 3.42 trillion yen, $1 = 145 Deribit’s chief commercial officer (CCO) Luuk Strijers told CoinDesk.

Bitcoin options accounted for 67% of that, with Ethereum accounting for the rest. In Deribit, one option contract represents 1 BTC and 1 ETH.

“Deribit’s expected option open interest is $16 billion (approximately 2.32 trillion yen) for BTC options and $7.6 billion (approximately 1.1 trillion yen) for ETH options, for a total of $23.6 billion, a new record high. Adding the $2.2 billion in perpetual and futures OI, the $25 billion milestone was reached for the first time.The total now stands at $25.8 billion. yen)!,” Streiers told CoinDesk.

Options allow investors to hedge their spot/futures market exposure by placing leveraged bets on the underlying asset. A call option gives you the right, but not the obligation, to buy the underlying asset at a later date at a predetermined price. A put gives you the right to sell.

Options trading is three-dimensional, allowing investors to bet on the direction of price movement, the expected magnitude and time of price changes. Spot and futures markets are one-dimensional, focusing only on the direction of prices.

Therefore, record options open interest will mean an influx of sophisticated traders into the crypto market, promising better price discovery.

At the time of writing, most of the open interest in Bitcoin and Ethereum options was concentrated in call options. In the case of Bitcoin, open interest is concentrated in calls at $50,000, $40,000, and $45,000 strikes. In the case of Ethereum, calls at $2,300, $2,400, $2,500, and $3,000 are popular.

The bias toward calls is consistent with continued gains in both crypto assets, suggesting expectations for continued upside.

Bitcoin breached the $44,000 mark earlier this week, its highest since April 2022, largely due to optimism over exchange-traded fund (ETF) approvals and falling U.S. Treasury yields. It’s the background. Bitcoin is up more than 150% this year.

Ethereum approached $2,400 on December 8th, its highest since May 2022, extending its year-to-date gain to 98%.

｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Image: Shutterstock
｜Original text: Bitcoin, Ether Options’ Value on Deribit Reaches Record High of $23B