Billions of Dollars in Bitcoin and Ethereum Options Set to Expire

The expiration of $4.8 billion worth of Bitcoin and Ethereum options next week is expected to lead to significant price movements in the crypto market.

Analysts have noted that with the expiration of $3 billion worth of Bitcoin options and $1.8 billion worth of Ethereum options on September 29, there could be significant price movements in the crypto market throughout the next week.

What Are Options?

In short, options are derivative contracts that give users the right to buy or sell an asset at a predetermined price on or before a specified expiry date. To learn more about the details of options, you can read our article below.

Market Makers Tend to Increase Volatility

When looking at previous data, fluctuations in the crypto market have been observed to increase, especially in the period leading up to the expiration of options. Analysts speaking to The Block have noted that market makers tend to increase market volatility leading up to the expiration of options.

Developing Complex Strategies Towards the End of Option Periods

Additionally, institutional participants using the Deribit derivative exchange often develop complex strategies towards the end of the option periods. Deribit is a significant derivative exchange known for cryptocurrency derivatives, Bitcoin options, and futures. Numerous different strategies are employed for both futures and options on this exchange.

This situation is also believed to lead institutional investors to frequently adjust their hedge positions, potentially impacting the price of Bitcoin and market volatility.

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