Bitcoin (BTC) is like a top athlete in the pole vault, continually looking to break through ever higher bars. BTC recently hit a new ATH above $ 24,000. BTC derivatives are also registering significant increases.
Exchanges and a Bitcoin bordering on the billion dollars
According to a tweet posted by Skew on December 17, 2020, the volume of options BTC broke the billion dollar mark on December 16, 2020.
The exchange Deribit which dominates the sector, had recorded the highest volume of options BTC, to $ 879 million.
Bit.com, the exchange of derivatives belonging to the service platform Matrixport supported by Bitmain, took 2nd place, with a volume of 84 million dollars.
OKEx completes this podium recording a volume of 62 million dollars. The options market Bitcoin has experienced strong growth throughout this year.
The significant increase in volume coincides with the increase in open interest on options BTC.
Statistics Skew show that open interest on options BTC approach $ 6 billion on December 16, 2020.
Why care about open interests?
Open interest on options BTC represent the total value of outstanding futures contracts that have not yet been settled.
Options are derivative products with many applications in trading, such as hedging an existing position against a possible decline, or price speculation with an asymmetric “risk – return” pair.
The high open interest rates reflect options with increasing liquidity and increasing market participants.
Spikes in open interest may also be linked to larger macroeconomic factors, such as the DeFi boom.
They can also be seen as one of the long-term consequences of halving in the markets.
BTC sets the bar high. Spot markets rarely appreciate an explosion in open interest in derivative markets. Bitcoin tends to experience a bearish reversal as open interest on BTC options experiences significant growth. Derivatives are now part of the trading tools of pro BTC traders and especially institutions. Long gone are the days of the first mining and the first Bitcoins that were exchanged hands, without the complications brought by increasingly sophisticated financial instruments.
Litecoin, welcome in the Silver Age