Record $15B Bitcoin Options Open Interest on Deribit Exchange

• Unprecedented Influx in BTC Options on Deribit Exchange
• Increasing Popularity of Bitcoin Options
• Active Bitcoin Options Contracts
• Deribit's Record-breaking Achievement
• Options Surpass Futures in BTC Market
• Increasingly Bullish Options Flow
• Block Trades of December Expiry Call
• Ether Options Notional Open Interest

Unprecedented Influx in BTC Options on Deribit Exchange

Deribit, a popular cryptocurrency exchange, recently experienced a new high in notional open interest for BTC options, with an impressive peak of $15 billion. This surge in activity indicates a growing inclination among traders towards options for leveraging profits and hedging.

Increasing Popularity of Bitcoin Options

Last Friday, the US dollar value tied up in active bitcoin options contracts, referred to as notional bitcoin open interest, reached an all-time high of $15 billion. This is a significant increase, more than doubling the figures from late September, and exceeding the previous high of $14.36 billion seen during the bullish market of October 2021. While the BTC value was above $60,000 at that time, it now stands around $37,200.

Active Bitcoin Options Contracts

At the time of writing, the notional options open interest had fallen slightly to $13.8 billion. In contract terms, the open interest was over 376,000 BTC, almost twice the October 2021 figures, albeit falling short of the record 433,540 BTC in March the same year. One options contract on Deribit is equivalent to one bitcoin.

Deribit's Record-breaking Achievement

Officer Luuk Strijers announced a record-breaking $15 billion in notional open interest in BTC options. He highlighted this accomplishment as a testament to the growing popularity of options among traders, used for positioning, hedging, or leveraging in light of the recent increase in implied volatility. Deribit is the leading global crypto options exchange, contributing close to 87% of the $25 billion global crypto options open interest.

Options Surpass Futures in BTC Market

Options, financial contracts signifying the right to buy or sell an asset such as bitcoin in a set period, have recently overtaken futures in the BTC market, indicating market advancement. In the wake of a recent rally of bitcoin from $25,000 to $38,000, traders have been eager to gain bullish exposure through call options.

Increasingly Bullish Options Flow

Institutional cryptocurrency trading network Paradigm reported strong bullish tendencies, with outright calls being bought in large quantities for both BTC and ETH. Moreover, call spreads for BTC are being rolled higher. In 2019, Deribit joined forces with Paradigm to launch a block trading tool, a valuable resource for large, privately negotiated trades in futures and options.

Block Trades of December Expiry Call

According to Amberdata, last week saw significant block trades of the December expiry call at $40,000 and the January expiry call option at $50,000. One trader executed a $2.8 million premium straddle, an options strategy designed to benefit from a decrease in price volatility. Volatility selling strategies like this were popular during the summer when both BTC and ETH remained stagnant.

Ether Options Notional Open Interest

Notional open interest in ether options has shown an upward trend and now stands at $6.83 billion. Despite the increase, it remains below the record high of almost $8 billion recorded in September 2022, when the Ethereum$2,315 -2.42% blockchain switched to a proof-of-stake consensus mechanism.

Edited by Jonathan Stoker