Bitcoin and Ethereum Options Nearing $1.54 Billion Expiry Ahead of ETF Deadline

As the cryptocurrency market braces for a critical juncture, with the impending deadline for Bitcoin spot Exchange-Traded Fund (ETF) approvals, options traders are closely monitoring a staggering $1.54 billion worth of expirations. In a tweet from on January 5, it was revealed that 22,000 Bitcoin (BTC) options, valued at $960 million, and 255,000 Ethereum (ETH) options, valued at $580 million, are set to expire.

The Bitcoin options market reflects a Put Call Ratio of 0.62, signaling a market sentiment slightly leaning towards bearishness. The Maxpain point, the price at which the total value of all options would be minimized, stands at $43,500. Conversely, the Ethereum options market displays a Put Call Ratio of 0.54, with a Maxpain point at $2,300. The notional value of both options expirations underscores the significance of these impending market movements.

Meanwhile, the latest price movements reveal a mixed but cautiously optimistic sentiment. Bitcoin is currently trading at $43,871, marking a 1.54% increase over the last 24 hours. This modest gain follows a week of notable volatility. Ethereum is priced at $2,243, reflecting a 0.66% uptick in the same period. The broader market, as indicated by the global crypto market cap, stands at $1.66 trillion, experiencing a 1.08% increase over the last day.

Market Volatility Amid ETF Buzz

This development comes on the heels of a tumultuous week for the crypto market, marked by a substantial sell-off triggered by the rumors of the failure of the Bitcoin spot ETF to gain approval. This led to the liquidation of a significant amount of high leverage accumulated in the previous period, sparking heightened volatility in the market. Short-term Implied Volatility (IV) has surged, with the market now actively strategizing around the ETF decision.

IVs have reached 80% or more, reflecting the intense speculation and uncertainty prevailing in the market. As the cryptocurrency community braces for the Bitcoin ETF decision, set to be finalized soon, the options market seems to be intricately entwined with the fate of these financial products. The current funding rates and leverage levels in the market suggest that the dramatic volatility witnessed this week may not repeat itself in the near term.

In the broader context, the race for the coveted Bitcoin spot ETF approval involves 12 issuers, with industry giants such as BlackRock, Fidelity, Grayscale, and Franklin Templeton among the contenders. Speculation is rife regarding the U.S. Securities and Exchange Commission’s (SEC) potential approval of multiple Bitcoin spot ETF applications today.

However, the industry faces the challenge of a historically reticent SEC, which has previously rejected such applications citing concerns about market manipulation vulnerability. The SEC has been a formidable adversary, initiating legal actions against key players in the cryptocurrency space. The cryptocurrency market is now on edge as it navigates through this crucial period, with the expiry of significant options and the looming decision on ETF approvals shaping the trajectory of the market in the days to come.