Bitcoin headed for Christmas volatility as 100K BTC options expire

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In a Monday tweet, crypto data provider Skew reported that 102,200 Bitcoin (BTC) options expired on Friday.

Options contracts allow holders to buy or sell Bitcoin at a specific price known as the strike price. The expiration on Friday features notable clusters around the strike price of $ 15,000 and the strike price of $ 20,000, according to Skew.

Expiration date of Skew’s BTC options

The expiration date of bitcoin options contracts is widely viewed as a volatile event for the flagship cryptocurrency as holders adjust their contracts towards the end. Traders who make profits can also choose to receive the payout and spend the cryptocurrency.

According to Skew, the BTC options expire on Friday after the strike price

It is known that such events cause large swings in the value of Bitcoin. Typically, the impact of a contract on BTC price becomes more noticeable around a day or two before it expires.

Crypto derivatives trading has spiked this year as more traders and institutional investors look for additional Bitcoin exposure. Last week, the crypto derivatives platform Deribit began offering Bitcoin futures with an exercise price of USD 100,000 that expires on September 24, 2021. In other words, Bitcoin enthusiasts who believe the cryptocurrency will hit a six-digit moon shot can now make that bet in the futures market.

Bitcoin is currently in the midst of a bull market that is being driven in part by institutional investors and large over-the-counter deals. Despite the expected volatility of the futures, there is a good chance that Bitcoin will continue to be well supported by institutional demand and the rise in so-called illiquid wallets – that is, addresses that have sent less than 25% of the BTC they ever received. Chainanalysis estimates that illiquid wallets hold 77% of the 14.8 million BTC mined that were not lost.

Bitcoin futures worth around $ 2.3 billion expire on Christmas Day and form the basis for a volatile week in the cryptocurrency market.

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