In a Monday tweet, crypto data provider Skew reported those 102,200 Bitcoin options expire on December 25th.
Option contracts allow holders to buy or sell Bitcoin at a specific price, known as the strike price. The December 25 expiration has notable clusters around the $ 15,000 strike price and the $ 20,000 strike price, according to Skew.
The expiration date of Bitcoin options contracts is widely regarded as a fleeting event for the flagship cryptocurrency because, as the expiration date approaches, holders adjust their contracts. Traders who are making a profit can also decide to receive the payout and dump the cryptocurrency.
Such events are known to be the cause large fluctuations in the value of Bitcoin. Typically, the impact of a contract on the BTC price becomes more apparent about one or two days before it expires.
Crypto derivatives trading has skyrocketed this year as more traders and institutional investors seek additional exposure to Bitcoin. Last week crypto derivatives platform Deribit started offering Bitcoin futures with a strike price of $ 100,000 Expires September 24, 2020. In other words, Bitcoin enthusiasts who think the cryptocurrency will hit a six-digit moonshot can now make that bet in the futures market.
Bitcoin is currently in the middle of a bull market this is partly fueled by institutional investors and large over-the-counter transactions. Even with the futures’ expected volatility, Bitcoin is likely to remain well supported by institutional demand and the emergence of so-called illiquid wallets, i.e. addresses that have sent less than 25% of the BTC they ever received. Chain analysis believes illiquid wallets hold 77% of the 14.8 million BTC mined that have not been lost.
About $ 2.3 Billion in Bitcoin (BTCfutures expire on Christmas Day, setting the stage for a volatile week in the cryptocurrency market.