The crypto options market developed rapidly in the second quarter of 2020. According to TokenInsight’s cryptocurrency derivatives report, trading volume shows a growth of 166% year-over-year compared to the second quarter of 2019.
The derivatives that define these sizes are futures and options. As futures rise and traders bet on bullish price sentiment, both open interest and option volume consistently peak.
Confirms all the time
On Wednesday, open interest in Ether (ETH) options peaked at $ 351 million on Deribit and $ 37 million on OKEx. In fact, open interest in Ethereum options is 2.5 times higher than it was in early July.
The day before the biggest Bitcoin Expiration (BTC) event on July 3, interest rates on Bitcoin Options peaked at $ 1.7 million on Deribit and $ 268 million on CME, while daily volumes doubled on Deribit. Compared to an all-time high of more than 47,500 contracts sold on July 28.
This rally, which was seen consistently on the day before it expires on the last Friday of the month, could mean an increased acceptance of options and structured products, especially given OI standard values even at CME, the world’s largest derivatives exchange.
Total number of BTC / ETH options
Deribit’s chief trade officer, Luke Strayers, said the OI was the best indicator to gauge the market and told Cointelegraph: “Open interest is the best indicator to gauge market acceptance and when we look at the listings, it becomes clear that we are close to the end of the July peak … and added:” There are currently 116,000 BTC options with a face value of $ 1.5 billion.
New prospects for investors
Options are financial instruments that allow investors to buy or sell an underlying asset depending on the type of contract they hold. Buy options give owners the right to buy an asset at the default price for a specified period of time, and buy options give owners the right to sell an asset on similar terms. Denis Vinokurov, Head of Research at BeQuant, a cryptocurrency exchange provider and institutional broker, told Cointelegraph:
“Alternatives are a very effective way to provide access to the underlying product, be it Bitcoin, Ethereum, or even futures / perpetual contracts. Additionally, it is easier to structure products that provide“ profitability, ”and this is particularly attractive to market participants, especially after the move. Parallel to market prices.
Lennix Lai, OKEx Director of Cryptocurrency Financial Markets, told Cointelegraph that traders should be careful because “high OI indicators alone do not indicate that the market is bullish or bearish,” adding that investors are choosing long-term strategies:
“We have realized that there are many professionals who are taking advantage of opportunities to protect their long-term BTC portfolio. There are many structured products available in the market that target professionals with the goal of increasing returns or exotic benefits.”
With the bitcoin price briefly crossing the $ 11,900 mark earlier this month, public interest in the cryptocurrency is growing. Bitcoin is up 27% since July 1, the highest jump in 2020. Bitcoin options are currently traded primarily on Deribit, CME, OKEx, and LedgerX, while Bakkt, the cryptocurrency exchange owned by the major traditional exchanges, the Intercontinental Exchange, does not see. No options though product included.