Trading volume across crypto derivatives listed on the Panama-based Deribit exchange remained brisk last month even as the global activity cooled.
Deribit's derivatives market volume rose to $42 billion in August, a 17% increase versus July, bucking the global downtrend that saw worldwide derivatives volumes decline 12.1% to around $1.6 trillion, the exchange said in the monthly review shared with CoinDesk. Volume figures represent total activity in options, futures and perpetual futures segments.
"The resilience can be attributed to the strong performance of our options segment. Notably, ETH options recorded their highest volumes since March of this year. Meanwhile, BTC continues to show strength, initially buoyed by its use as a banking system hedge in March and now further invigorated by the upcoming ETF decision," Luuk Strijers, chief commercial officer at Deribit, told CoinDesk.
Options are derivative contracts that give the purchaser the right to buy or sell the underlying asset at a preset price at a later date. A call option offers the right to buy and a put gives the right to sell. Deribit controls nearly 90% of the global crypto options activity.
Bitcoin (BTC), the largest crypto asset by market value, experienced violent price swings between $25,000 and $30,000, triggering massive liquidations in futures and options on Deribit and boosting hedging demand for call and puts. Deribit's bitcoin implied volatility index (BTC DVOL) and similar ETH-focused gauge surged to 53% and 50%, respectively from their respective historic lows in a sign of renewed demand for options.
More than 5.6 million ether (ETH) option contracts, worth $9 billion at the ETH's current market price of $1,624, changed hands last month. That's the highest single-month tally since March.
Meanwhile, about 0.7 million BTC options contracts were traded. On Deribit, one options contract represents 1 ETH and 1 BTC.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.