Can $2.5 Billion Crypto Options Expiration Boost Market Momentum?

On Friday, August 9, approximately 32,000 Bitcoin options contracts will expire, with a notional value of approximately $1.9 billion.

Today’s options expiration is slightly smaller than last week’s, so its impact on cash markets should be limited.

Crypto Options Expiration

This week’s Bitcoin options jackpot has a put/call ratio of 0.71, meaning more call (long) contracts are expiring than put (short) contracts. The pain point, or the point at which most losses will be incurred, is at $60,000, which is just below current spot prices after today’s rally.

According to Deribit, there are still plenty of open interests (OI), or contracts that have not yet expired, at strike prices of $65,000, $70,000 and $75,000.

Crypto derivatives provider Greeks Live has commented that cryptocurrency market sentiment has returned following a looser stance from the central bank of Japan.

She added that long-term implied volatility (IV) is down but still higher than before the crash, “and with the high volatility, it is difficult for IVs to fall sharply for a short period of time.”

August 9 Options Data
32,000 BTC options are about to expire with a Put Call ratio of 0.71, a Maxpain point of $60,000 and a notional value of $1.9 billion.
206,000 ETH options are about to expire with a Put Call Ratio of 0.96, a Maxpain Point of $2,950 and a Notional Value of $560… pic.twitter.com/soKryrB4Hw

— Grecs.live (@GreeksLive) August 9, 2024

In addition to the current Bitcoin options, 206,000 Ethereum options are set to expire. These have a notional value of $560 million, a put/call ratio of 0.96, and a maximum pain point of $2,950, which is well above current spot prices. This brings the total expired crypto options to $2.5 billion in notional value.

Cryptocurrency markets rallied strongly on Thursday and Friday during the Asian trading session, with total capitalization reaching $2.23 trillion. They were mainly led by strong movements in BTC, which rebounded after a deadly cross, and ETH, after a retail buying spree.

Other options News

In other crypto options news, the CBOE filed a proposed rule change for options on cash Bitcoin ETFs. The CBOE, Nasdaq, and NYSE American filed for options on cash BTC ETFs in January but were blocked by the SEC in March and April.

On August 9, Bloomberg ETF analyst James Seyffart said the latest filing could suggest the SEC has reacted.

Meanwhile, Grayscale, Bitwise and NYSE American have filed with the SEC for a rule change to list options on three spot Ether ETFs on August 7. Options offer more flexibility than futures contracts because they give traders the ability to sell contracts at a fixed price or date.