Will $4.3B in Bitcoin Options Expiring Tank Crypto Markets?

Friday, July 26, will see around 61,200 Bitcoin options contracts with a notional value of around $4.26 billion.

The options expiry event is larger than usual expiries because it is the end of the month.

Moreover, spot markets lost some momentum this week despite the launch of spot Ethereum ETFs in the United States for the first time.

Bitcoin Options Expiry

Today’s big batch of Bitcoin derivatives has a put/call ratio of 0.61, which means almost twice as many long contracts are expiring as shorts.

Open interest at higher strike prices seems to favor the bulls with $942 million at $70,000 and a whopping $1.3 billion at a $100,000 strike price, according to Deribit.

On the put side, there is around $500 million in OI at the $60,000 strike price.

In addition to the BTC contracts, there are around 500,000 Ethereum options contracts expiring on July 26. These have a notional value of $1.76 billion.

The put/call ratio on the ETH contract expiries is 0.46 meaning that there are more than twice as many long contracts expiring than shorts. The largest amount of open interest is at the $4,000 strike price with over $520 million, according to Deribit.

The two batches of crypto options combined have a notional value of around $6 billion, making it one of the largest expiry events this year.

Additionally, Ethereum ETFs had their second day of outflows on July 25, with $152 million leaving the products overall. This has been caused by another big Grayscale exodus of $346 million despite BlackRock and Fidelity getting more than $100 million inflows between them.

Crypto Market Impact

Spot markets have declined by around $120 billion this week, with Bitcoin retracing to $64,000 on July 25.

Despite a recovery from a $54,000 low in early July, BTC failed to break through resistance at $68,000 earlier this week and fell back. However, it reclaimed $67,000 during the Friday morning Asian trading session.

Ethereum has fared much worse despite the spot ETFs launching. ETH fell 11% since launch day, dipping to $3,100 on July 25 before recovering to $3,250 during Asian trading on Friday.