Bitcoin’s $6.5 billion option expires on May 31

Marcel Pechman, who has 17 years of experience in traditional financial transaction sales and is currently a cryptocurrency analyst, issued an article this morning (29th) to remind investors that Bitcoin options with a nominal value of US$6.5 billion will be held on 5 Taiwan time. The expiry date is 4:00 pm on the 31st. Call option traders are currently in the dominant position, but the current price performance shows that the bulls are overly optimistic.

Pageman said the options market is also awash with bullish sentiment due to Bitcoin's recent surge of 25% from $56,883 to $71,417.

However, as Bitcoin falls back to near $68,000, these overly optimistic call orders may become worthless, with a whopping 91% of call orders falling at $72,000 or higher, indicating that bulls hope that Bitcoin Can continue to rebound before May 31st.

Analyst: Bulls stand to make $270 million if Bitcoin trades above $70,000

Pageman pointed out that although the notional value of the call options is 70% higher, the $4.62 billion in open interest in Bitcoin options contracts is likely to be much lower, according to data from leading options exchange Deribit. If the Bitcoin price is below $70,000 at expiration, 99% of the options will be considered void.

According to Pechman’s calculations, if the Bitcoin price remains near $67,800 at expiration, the total open interest for call options will be $135 million, and the total open interest for put options will be $145 million. It is in a relatively balanced state, but both parties still have incentives to influence the price before expiration.

Source: Deribit data

For example, Pageman said that if Bitcoin falls to $65,900, the seller will make a profit of $95 million; if it rises above $70,000, the buyer will make a profit of $270 million.

With less than 3 days left until expiration, it would be surprising if the bulls could push Bitcoin above $70,000 given the lack of short-term catalysts.

The market share of option open interest in May is as follows: Deribit’s open interest exceeds US$4 billion, accounting for 71%, CME Group’s open interest is US$745 million, OKX Exchange’s US$600 million, Binance exchange is US$315 million and Bybit is US$160 million.

Deribit executive reveals short-long ratio of Bitcoin options

Lin Chen, head of Asia-Pacific commerce at Deribit, also shared options data dynamics on May 27. She pointed out that Deribit’s total Bitcoin option holdings have a notional value of $4.54 billion, a short-to-long ratio (put/call option ratio) of 0.58, and the largest pain point is located at $65,000.

On the other hand, there were also Ethereum ($ETH) options expiring at the end of May with a notional value of $3.45 billion, with the biggest pain point at $3,300, well below the spot price, and a short-to-long ratio of 0.84 (well above average). Considering that the Ethereum spot ETF incident and the macroeconomic impact should be more profound, Lin Chen believes that the price of the biggest pain point this time has little reference value.

[Disclaimer] There are risks in the market, so investment needs to be cautious. All opinions and analyzes in this article are for reference only. Users should refer to more diverse indicators to judge whether to invest, and consider whether any opinions, views or conclusions in this article are consistent with their specific circumstances. Invest accordingly and do so at your own risk.