A renewed surge in interest for Bitcoin options has been reflecting the bullish sentiment seen in the cryptocurrency space, with Deribit-listed Bitcoin call options with a strike price of $200,000 seeing a notional open interest of over $20 million.
Open interest represents the total USD value of outstanding contracts and has been growing amid Bitcoin’s price rise since the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States, which saw the cryptocurrency hit a new all-time high near $70,000 this week.
Data from Deribit Metrics, as CoinDesk reports, reveals a breakdown of this interest, with $14.6 million concentrated in calls expiring on December 27th, 2024, at the $200,000 strike price. The remaining open interest is spread across options expiring in June and September.
In essence, purchasing these deep out-of-the-money (OTM) calls is a speculative bet on Bitcoin exceeding $200,000 by the expiry date. Call options grant the buyer the right, but not the obligation, to purchase the underlying asset, in this case Bitcoin, at a predetermined price (strike price) by a specific date (expiry).
This strategy is popular among investors with a bullish outlook on the market. The recent resurgence of interest in deep OTM calls aligns with the prevailing belief that the upcoming Bitcoin halving – a pre-programmed event that reduces the supply of new Bitcoins entering circulation in half by slashing the coinbase reward miners receive per block – will further tighten supply.
Demand for the flagship cryptocurrency has been surging since the launch of spot Bitcoin ETFs in the United States, with data shared by BitMEX Research showing these funds have attracted over $9.3 billion in net inflows since launch.
Deribit, the leading crypto options exchange, has seen its total open interest in Bitcoin options reach a record $20.4 billion, surpassing the previous peak set in October 2021, while open interest in Ethereum options has surged to a lifetime high of $11.66 billion since the start of the bull market.
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