According to the data published on Twitter by Skew analytics, some 63,100 Bitcoin (BTC) options contracts will expire this Friday, February 26. On this day, contracts with a strike price of ,000, worth about 0 million are expected to expire. According to the chart included in the tweet, the highest open interest rate (4,400) falls on BTC contracts with a strike price of ,000. 63.1k #bitcoin options expiring this friday. 56k strike is open in 0mln notional. Largest strike is 48k with 4.4k options open. pic.twitter.com/RMJE7zATFL — skew (@skewdotcom) February 22, 2021 Also, according to Skew data, the total open interest in Bitcoin is about billion. At the same time, you can see on the chart below that this value doubled from December to January. Source: Skew The above
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On this day, contracts with a strike price of $56,000, worth about $160 million are expected to expire. According to the chart included in the tweet, the highest open interest rate (4,400) falls on BTC contracts with a strike price of $48,000.
— skew (@skewdotcom) February 22, 2021
Also, according to Skew data, the total open interest in Bitcoin is about $3 billion. At the same time, you can see on the chart below that this value doubled from December to January.
The above statistics also show that, despite a slight decline in January 2021, open interest grew again, reaching $10 billion by February 11. As of February 21, this figure was already about $13 billion.
What does this mean for the Bitcoin market?
Open interest (OI) is the total number of Bitcoin options contracts that are held by market participants at the end of each day. It measures the number of contracts that will expire. Bitcoin traders use it as an indicator to speculate the price of Bitcoin so as to make better decisions.
In addition, high open interest near the expiration date of options often leads to increased volatility in the spot market as traders actively adjust their positions ahead of the expiration date.
A similar situation was observed in June 2020, when 100,000 BTC options expired against the background of explosive growth in open interest.
Deribit exchange takes the lead
Deribit is again the market leader among cryptocurrency exchanges in the Bitcoin options market. This exchange has long held the leading position in terms of trading volume for BTC contracts.
For the first time, the open interest rate for BTC options on Deribit exceeded $1 billion in the spring of 2020. As of February 19, it amounted to $1.7 billion. According to statistics, open interest always exceeds the $1.5 billion mark on a daily basis.
While Bakkt launched options on Bitcoin futures back in December 2019, they gained popularity towards the end of 2020. In January 2020, the Chicago Mercantile Exchange (CME) followed Bakkt’s example, and in April 2020, Binance also launched its own futures and options trading platform.
However, compared to Deribit, the open interest rate on CME looks like a drop in the ocean. In the meantime, Bakkt has zero while Binance has stopped offering options on its platform.
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