- Bitcoin options traders are positioning for higher prices.
- Bets that Bitcoin's price will increase are becoming more expensive, options platform CEO says.
Options traders expect Bitcoin to jump following the September 27 options expiry.
Calls, or bullish bets, are more expensive than bearish ones, Luuk Strijers, CEO of Deribit, the largest crypto options exchange, told DL News. That’s a sign that traders piling in are driving demand, and thus prices, higher, he said.
This demand for calls adds to the options momentum going into the year’s end. December’s $5 billion options expiry is set to be the biggest for the rest of the year.
On Deribit, options that pay out if Bitcoin breaches $100,000 are the most traded for the December 27 expiry.
In the near term, 20% of all bullish bets that expire on Friday are already “in the money,” meaning they will pay out as long as Bitcoin’s price doesn’t fall.
Strijers said the large number of in the money calls is likely to increase future volatility as traders reinvest returns from profitable bets.
IBIT options
The surge comes as the US Securities and Exchange Commission last week greenlit the launch of options contracts on IBIT, BlackRock’s $21 billion Bitcoin exchange-traded fund.
The Office of the Comptroller of the Currency and the Commodity and Futures Trading Commission also need to sign off on IBIT options before they can launch, which is expected to happen next week.
Analysts argue that the launch of IBIT options will be a bullish catalyst for Bitcoin.
“It will be a huge net positive for volumes across the entire derivatives complex,” Joshua Lim, co-founder of crypto trading firm Arbelos Markets, said in an X post.
Jeff Park, head of alpha strategies at crypto fund manager Bitwise, called the launch of options on the Bitcoin ETF “game-changing.”
Park noted that IBIT options mark the first time the financial world will get regulated options on a commodity that is “truly supply-constrained.”
This, he said, could result in a so-called gamma squeeze — when the price of an asset increases rapidly due to a feedback loop of options buying activity.
Still, Strijers noted that Deribit’s Implied Volatility Index, a measure of options market volatility, is muted.
“The absence of any peak does indicate the market is not expecting any short term action,” he said.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
