Approximately $ 3.3 billion in options HODL or reinvest, the rivers of the cryptocurrency market could gush with fresh money.expire today. If merchants charge, they could throw a large amount of Bitcoin onto the market, which could put pressure on the price of Bitcoin. Yes
Besides the investments in Bitcoin, options contracts 400,000 ETH worth also expires today. That is worth around $ 613 million.
Option contracts give traders the right, but not the obligation, to buy some asset (in this case, Bitcoin) at a specific price at some point in the future. Bitcoin options are essentially another way to speculate on the price of Bitcoin.
You can trade these option contracts until they expire and become more valuable if they appear to be correct. They differ from futures contracts, which force traders to buy bitcoin at a price determined at the expiration of the contracts.
Options and futures contracts come in various shapes, sizes, and expiration dates. But the last Friday of the month is always clean and many contracts expire that day each month.
So what does this all mean?
Denis Vinokourov, head of research at cryptocurrency broker Bequant, isn't overly concerned. "Option flows are not yet at the size they can move the market by," he said recently..
More recently, Vinokourov has noticed that although the price goes down when traders cash in their options, it then goes up again. "It is worth noting that much of the flow is market neutral, rather than directional," he added. In other words: less buying and selling, more HODLing.
However, there is much more money in contracts that expire at the end of March; around 84,700 Bitcoin, according to Skew Analytics, currently worth $ 4 billion. It's the same story with Ethereum: 551,800 ETH expires on March 26, or $ 841 million.
That could be because the last Friday in March is close to the tax deadline, which in the US is April 15. Traders who profit from futures or options contracts should put that on their tax bills; losers can write it off as losses.