Bitcoin options trading on Deribit has reached unprecedented levels, with notional open interest peaking at a record $15 billion last week. Traders are increasingly seeking bullish exposure as the market matures, reflecting a notable shift in trading dynamics.
Record-Breaking Momentum on Deribit
Last Friday witnessed a remarkable surge in notional open interest for Bitcoin (BTC) options on Deribit, soaring to an all-time high of $15 billion. This milestone, a testament to the growing popularity of BTC options, signifies a more than twofold increase since late September. Although slightly retraced to $13.8 billion at present, the figure underscores the substantial demand for strategic trading tools.
Deribit stands as the preeminent crypto options exchange, commanding nearly 87% of the global crypto options open interest, which presently totals $25 billion. The exchange’s Chief Commercial Officer, Luuk Strijers, expressed excitement about achieving this ATH, emphasizing the escalating preference for options as a strategic asset among traders.
Options Surpassing Futures
In a noteworthy trend, the BTC options market has surpassed the BTC futures market, marking a milestone in market sophistication. Options contracts provide traders with the right to buy or sell an asset, presenting a dynamic approach to navigate volatile markets. The surge in BTC’s value since October, reaching $38,000 from $25,000, has spurred traders to actively pursue bullish exposure through call options.
Amid this surge, Paradigm, an institutional cryptocurrency trading network, notes a persistently bullish options flow. Large volumes of outright calls are being purchased for both BTC and ETH, while call spreads on BTC are being rolled to higher levels. This reflects a prevailing sentiment favoring positive price movements.
Market Dynamics and Strategic Moves
Market participants have been drawn to BTC options for various reasons, including optimism surrounding an impending spot bitcoin ETF approval and broader macroeconomic developments. Notable strategic moves include large block trades for December expiry calls at $40,000 and January expiry calls at $50,000. Additionally, a trader engaged in a volatility-selling strategy, selling a straddle for a premium of $2.8 million.
While Bitcoin options steal the spotlight, the notional open interest in Ethereum (ETH) options has seen a notable uptick, reaching $6.83 billion. Although below the September 2022 peak of nearly $8 billion, this indicates a growing interest in options trading for Ethereum.
The surge in options trading on Deribit reflects a maturing market where traders increasingly leverage these sophisticated financial instruments for strategic positioning, hedging, and capitalizing on heightened volatility. As the crypto landscape evolves, options trading is set to play an integral role in shaping market dynamics.