Bitcoin bulls are set to net an $830M profit after Friday’s BTC options expiration, according to the CME Group.
Bitcoin bulls set to net an $830M profit after Friday’s BTC options expiry. Read more in detail here: highest volume crypto coins.
A trader betting on $65,000 by Oct. 22 would have been regarded very optimistic two or three weeks ago, when Bitcoin (BTC) was trading below $52,000. This is shown by the fact that 98 percent of the put (sell) options on Bitcoin’s weekly options expiring this Friday have been placed below that price.
The successful launch of the first BTC exchange-traded fund (ETF) in the United States, as well as news that Digital Currency Group (DCG), the parent company of the Grayscale Bitcoin Trust, increased its limit to acquire up to $1 billion worth of GBTC shares, propelled Bitcoin price to new all-time highs this week.
Since March 2015, the $40.5 billion investment vehicle has been accessible for trading on US exchanges, and it has just submitted a request with the US Securities and Exchange Commission (SEC) to convert its GBTC product to an ETF.
In USD, the price of bitcoin on Coinbase. TradingView is the source of this information.
The stock’s meteoric rise to an all-time high of $67,000 on Oct. 20 was aided by billionaire investor Carl Icahn’s positive comments. Icahn, who has made a fortune in the stock market for four decades, has warned of an approaching financial catastrophe and emphasized Bitcoin’s value as an inflationary hedge.
Additionally, Russia’s deputy minister of Industry and Trade, Vasiliy Shpak, is said to have submitted a proposal to utilize the country’s oil exploration gas output to power cryptocurrency mining. The Russian government has tried to minimize gas flaring in order to reduce emissions, but owing to undeveloped infrastructure, it has been unable to achieve goals.
Even while the $1.8 billion options expiration on Friday is a landslide win for bulls, it wasn’t that way a few weeks ago.
Open interest in bitcoin options on October 15th. Bybt is the source.
At first glance, the $1 billion call (buy) options seem to have a 23 percent lead over the $810 million put (sell) options for the Oct. 22 expiration.
However, the 1.23 call-to-put ratio is misleading since if Bitcoin’s price stays over $64,000 by 8:00 a.m. UTC on Friday, the recent surge would likely wipe out most of the pessimistic bets. If Bitcoin is selling over $60,000, a right to sell it at that price has no value.
Bulls seem to be at ease over $65,000.
The four most probable possibilities for the Oct. 15 deadline are listed below. The potential profit is represented by the imbalance favoring either side. In other words, the number of active call (buy) and put (sell) contracts changes based on the expiration price:
- 8,670 calls vs. 3,070 puts between $60,000 and $62,000. The overall outcome favors the call (bull) instruments by $335 million.
- 10,780 calls vs. 2,100 puts between $62,000 and $64,000. The overall outcome favors the call (bull) instruments by $540 million.
- 13,050 calls vs. 280 puts between $64,000 and $66,000. The overall outcome favors the call (bull) instruments by $830 million.
- Over $68,000, there are 13,680 calls and 20 puts. Bulls profited $940 million as a consequence of their total domination.
Call options are utilized entirely in bullish wagers, whereas put options are used exclusively in neutral-to-bearish transactions, according to this rough estimate. This oversimplification, however, ignores more complicated investing methods.
A trader, for example, might have sold a put option to acquire positive exposure to Bitcoin above a certain price. However, there is no simple method to quantify this impact.
To minimize their loss, the bears need a 7% price drop.
Bulls have complete control of this Friday’s expiration in each of the situations shown above. Investors have no incentive to cut profits or tolerate a market fall ahead of the expiration due to this week’s favorable newsflow. Bears, on the other hand, require a 7% drop below $62,000 to avert a loss of $830 million.
Traders must keep in mind that during bull markets, a seller’s attempt to push the price is enormous and generally unsuccessful. Data from the options markets now show that call (buy) options have a significant edge, fuelling even more optimistic bets for the monthly expiration on Oct. 29.
The author’s thoughts and opinions are entirely his or her own and do not necessarily represent those of Cointelegraph. Every investing and trading decision has some level of risk. When making a choice, you should do your own research.
Bitcoin bulls set to net an $830M profit after Friday’s BTC options expiry. Large cap crypto is a term used for cryptocurrencies that have been listed on the major exchanges such as Binance, Bitfinex, and Coinbase. Reference: what are large cap crypto.
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