Bitcoin’s (BTC) market is preparing for a $10.1 billion options expiry, a significant event set to occur on Dec. 29 at 8:00 am ET. The latest data indicates that call (buy) options hold a clear advantage, but bears could significantly limit their losses by pushing Bitcoin’s price below $42,000.
Both sides have incentives to influence Bitcoin’s spot price, but as the deadline approaches, one can gauge the outcome based on the expiry price. The options market leader, Deribit, boasts an impressive $7.7 billion open interest, but the surprise comes from the runner-up, the Chicago Mercantile Exchange (CME), with $1.38 billion. The CME’s open interest is more than double that of OKX, which is in third place with $630 million.
Spot Bitcoin ETF expectations gave bullish options an edge
The impending approval of a spot Bitcoin exchange-traded fund (ETF) in January has a substantial impact on the December options expiry. The Securities and Exchange Commission (SEC) has notably changed its approach in how it engages with ETF proponents. Instead of outright rejections, the SEC has been actively engaging in dialogue with ETF creators. This shift in approach is a positive signal and raises expectations of potential ETF approval in January. This alone explains why bears are unlikely to succeed in suppressing Bitcoin’s price below $40,000 ahead of the year-end BTC options expiry.
In another significant development, Binance’s recent plea deal with the U.S. Department of Justice and regulators signifies the evolving cryptocurrency landscape toward compliance and Anti-Money Laundering practices. This development indicates the increasing integration into the mainstream financial ecosystem, which also bolsters the odds of spot ETF approval, especially after changes on the Grayscale Investments’ board and the subsequent refiling of its request to convert the Grayscale GBTC Trust.
The aggregate open interest for the December options expiry stands at $10.1 billion. However, it’s projected that the final amount will be much less, as the recent rally above $40,000 caught bearish investors off guard, as evident from the Deribit Bitcoin…
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