Hitting and holding $100K Bitcoin price depends on $11.8B end-of-year BTC options expiry
2024.11.13 17:35
Bitcoin’s (BTC) market is preparing for the year-end $11.8 billion options expiry, set for Dec. 27 at 8:00 am UTC. Recent data reveals a strong advantage for call (buy) options, though bears could significantly limit their losses by keeping Bitcoin’s price below $75,000.
Aggregate Bitcoin options open interest for Dec. 27. Source: Laevitas.ch
As of now, the total open interest for call options is $7.9 billion, while put (sell) options lag at $3.92 billion—underscored by Bitcoin’s 29% rise since October, which has likely rendered most put options worthless.
Options market leader Deribit holds a dominant 74% market share, trailed by the Chicago Mercantile Exchange (CME) and Binance, each at 10.3%, more than twice OKX’s share at 4.3%.
Bulls and bears are incentivized to influence Bitcoin’s spot price, and as the expiry date nears, potential outcomes will depend on the imbalance of options at various strike prices.
December Bitcoin options expiry could ignite a BTC price surge
President-elect Donald Trump’s recent victory clearly boosted investor confidence, especially given his campaign promises to “fire” US Securities and Exchange Commission Chair Gary Gensler on “day one” and an unprecedented number of pro-crypto lawmakers who won their elections in the US House and Senate.
A pro-Bitcoin mining president could reduce regulatory barriers, potentially advancing approval for a “strategic Bitcoin reserve” and directing law enforcement agencies to hold, rather than liquidate, BTC seized from criminal activities. Legislation by Senator Cynthia Lummis seeks to amass up to 1 million Bitcoin over time.
For December’s options expiry, aggregate open interest stands at $11.8 billion, although the recent rally above $80,000 caught bearish investors off guard, reducing the final amount.
If Bitcoin’s price remains near $88,000 at 8:00 am UTC on Dec. 27, only $96 million of put (sell) options will be in play. This limited exposure arises because the option to sell at $85,000 becomes irrelevant if BTC is trading above that level at expiry.
Related: Bitcoin on track for $85K, breaks record $82.4K ‘uncharted territory’
Bitcoin bears target sub-$75,000 to minimize losses
Outlined below are five probable scenarios based on the current price trend. The imbalance on each side suggests the theoretical profit. These estimates do not account for complex strategies, but no straightforward method exists to measure their impact.
- Between $72,000 and $75,000: $1.4 billion in calls vs. $470 million in puts. The net result favors the call (buy) instruments by $930 million.
- Between $75,000 and $80,000: $1.85 billion calls vs. $270 million puts, favoring calls by $1.58 billion.
- Between $80,000 and $85,000: $2.74 billion calls vs. $130 million puts. favoring calls by $2.61 billion.
- Between $85,000 and $90,000: $3.38 billion calls vs. $96 million puts, favoring calls by $3.28 billion.
- Between $90,000 and $100,000: $4.52 billion calls vs. $74 million puts, favoring calls by $4.45 billion.
To avoid a major setback in the year-end expiry, bears must push for a price drop, targeting around $74,500. Conversely, bulls could maximize their gains by pushing BTC to $90,500 by Dec. 27. Overall, the current options market data points to sustained bullish momentum for Bitcoin into early 2025.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
