$18 Billion in Bitcoin and Ethereum Options Set to Expire Today
Today marks a significant event in the cryptocurrency market, with $18 billion worth of Bitcoin and Ethereum options contracts set to expire, the largest expiry recorded. This could lead to increased volatility and potential opportunities for traders and investors.
The total value of expiring options for Bitcoin is approximately $14.38 billion, while Ethereum's options account for about $3.7 billion. The volume of contracts expiring today includes 88,537 Bitcoin contracts and 796,021 Ethereum contracts, significantly higher than last week's figures, indicating heightened activity and anticipation among traders.
Bitcoin’s put-to-call (P/C) ratio is currently at 0.69, suggesting optimism as more traders are making bullish bets. Ethereum’s ratio has decreased to 0.41, indicating increasing confidence in ETH prices rising. Lower P/C ratios reflect a higher purchase rate of call options compared to put options.
Both BTC and ETH are trading above their respective maximum pain prices—$85,000 for Bitcoin and $3,000 for Ethereum. The "maximum pain price" is where options buyers face the most losses at expiry, often causing market adjustments toward this point.
David Lawant, Head of Research at FalconX, noted a rise in hedging sentiment contributing to Bitcoin's increasing P/C ratio during the last quarter of 2024. He stated that demand for downside protection is growing, as traders aim to safeguard year-end performance metrics. In October, Bitcoin’s P/C ratio for options expiring on December 27 was 0.35 but has now risen to over 0.70.
In contrast, Ethereum’s sentiment shows a decline in its P/C ratio from 0.97 at the end of October to 0.41, reflecting increased bullishness and confidence in sustaining or increasing ETH prices.
With leveraged positions favoring upside movements, sharp market fluctuations may occur if prices diverge from expectations. Analysts suggest that this record-breaking expiry could influence the market narrative for 2025, as traders await further developments.
As the year concludes, the crypto market prepares for potential price swings following today's significant options expiry. Investors should remain alert as these expiring contracts may shape future trends.