Friday's end-of-month bitcoin options expiry could trigger significant market volatility: Deribit

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The Block2024/09/25 16:44

By:Brian McGleenon

Friday’s end-of-month bitcoin options expiry could significantly impact market volatility, according to Deribit CEO Luuk Strijers.Major cryptocurrencies, such as bitcoin and ether, have traded flat over the past 24 hours.

September’s end-of-month bitcoin options expiry, the second-largest in open interest on the exchange, could lead to significant market volatility, according to Deribit CEO Luuk Strijers.

"The end-of-month September bitcoin options expiry is the second largest in open interest we currently have on Deribit. Friday's upcoming options expiry that will see over $5.8 billion expiring could trigger significant market activity and volatility after the expiration," Strijers said in an email sent to The Block.

Friday's bitcoin options expiry on Deribit could trigger significant market volatility. Image: Deribit.

The large number of expiring bitcoin options could lead to increased price swings as traders adjust their positions by either closing or extending them, which could noticeably affect the digital asset's price, according to Strijers. "This larger expiry is likely to heighten market volatility or activity as traders close or roll over their positions, which could also impact price," he said.

Strijers also highlighted the decrease in the put-call ratio , now at 0.62, as an indicator of growing bullish sentiment in the market. The put-call ratio compares the number of bearish put options to bullish call options, with a lower ratio typically indicating a more bullish outlook. According to Strijers, the put-call skew for both bitcoin and ether suggests that calls (bullish bets) are more expensive than puts (bearish bets) for longer-dated contracts for October, reinforcing a positive outlook.

In total, the $5.8 billion in options set to expire represents 33% of all outstanding contracts currently on Deribit, making this one of the most significant expiries of the year and one that could shape the market's direction in the near term.

Bitcoin BTC +0.54% traded flat in the past 24 hours, changing hands at $63,568 at 12:03 a.m. ET, according to The Block’s Price Page . The price of ether decreased by a muted 0.6% to $2,601 in the same period.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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