Bitcoin (BTC) is like a high performance athlete in pole vaulting, continually striving to reach higher and higher bars. BTC has recently reached a new ATH above $24,000 USD. BTC derivatives are also recording significant increases.
Exchanges and a Bitcoin close to a billion dollars
According to a tweet published by Skew on December 17, 2020, the volume of BTC options surpassed the billion dollar mark on December 16, 2020.
The industry-leading Deribit exchange had the largest volume of BTC options at $879 million.
Bit.com, the derivatives exchange belonging to the Bitmain-supported Matrixport service platform, took second place with a volume of $84 million.
OKEx completes this podium with a volume of 62 million dollars. Bitcoin's options market experienced strong growth throughout the year.
The significant increase in volume coincides with the increase in open interest on BTC options.
Skew statistics show that open interest on BTC options is approaching $6 billion on December 16, 2020.
Why be interested in open interest?
Open interest on BTC options represents the total value of outstanding futures contracts that have not yet settled.
Options are derivative products with many trading applications, such as hedging an existing position against a possible decline, or price speculation with an asymmetrical risk/return trade-off.
High open interest rates reflect options with increasing liquidity and an increasing number of market participants.
Peaks in open interest rates can also be linked to more important macroeconomic factors, such as the DeFi boom.
They can also be seen as one of the long-term consequences of halving markets.
The BTC sets the bar high. Spot markets rarely appreciate an explosion of open interest in derivative markets. Bitcoin tends to experience a bearish reversal as soon as the open interest on BTC options grows significantly. Derivatives are now part of the trading tools of BTC pro traders and institutional traders in particular. It is a long way from the time of the first mining and the first Bitcoins that were traded by hand, without the complications brought by increasingly sophisticated financial instruments.
Post a Comment