Bitcoin, Ether Options' Value on Deribit Reaches Record High of $23B

Increased interest in the three-dimensional options trading suggests an influx of sophisticated traders in the crypto market.

AccessTimeIconDec 8, 2023 at 7:19 a.m. UTC
Updated Jan 26, 2024 at 3:57 p.m. UTC
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Bitcoin (BTC) and ether (ETH) options trading on Deribit are hotter than ever.

As of Friday, the cumulative dollar value locked in the number of open or outstanding BTC and ETH options contracts, also known as notional open interest, was $23.6B, the highest ever, Deribit’s Chief Commercial Officer Luuk Strijers told CoinDesk.

Bitcoin options accounted for 67% of the tally, with ether contributing the rest. On Deribit, one options contract represents one BTC and one ETH.

“Deribit options notional open interest has reached a new ATH with $16 billion in BTC options and $7.6 billion in ETH options outstanding, resulting in a total of $23.6 billion. When adding the $2.2 billion in perpetuals and futures OI, Deribit has for the first time reached the $25 billion milestone (total now $25.8B!),” Strijers told CoinDesk.

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

Options trading is three-dimensional, allowing investors to bet on the direction of the price move, the degree of expected price volatility and time. The spot and futures markets are one-dimensional, focusing just on price direction.

Therefore, the record options open interest represents an influx of sophisticated traders in the crypto market and promises better price discovery.

At press time, most open interest in bitcoin and ether options was concentrated in call options. In bitcoin’s case, a large concentration of open interest is seen in calls at $50,000, $40,000, and $45,000 strikes. In ether’s case, calls at $2,300, $2,400, $2,500 and $3,000 are the most popular.

The bias for calls is consistent with the ongoing rally in both cryptocurrencies and suggests expectations for continued upside.

Bitcoin topped the $44,000 mark early this week, reaching the highest since April 2022, largely on the back of ETF optimism and receding U.S. Treasury yields. The leading cryptocurrency has gained over 150% this year.

Ether neared $2,400 early today, the highest since May 2022, extending the year-to-date gain to 98%.

Edited by Parikshit Mishra.

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Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.


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