Bitcoin’s $8 Billion Options Expiry on Friday Could Lead to High Volatility

September 29

Bitcoin (BTC) has surpassed the milestone of $65,000 seen since early August. The surge is coming ahead of an $8 billion Bitcoin options expiry due on Friday and is likely to lead to high volatility, analysts say.

Bitcoin is currently trading at $65,425, up 3% in the past 24 hours, according to data from CoinMarketCap. It has rebounded strongly from its tumble in early September, when it traded as low as $53,000.

While the upcoming $8 billion options expiry is significant, it’s not unprecedented. The final monthly expiry before this year’s Bitcoin halving in April saw a record $14 billion in options contracts.

Friday’s expiry remains, however, the second-largest monthly event on record for Deribit, the largest cryptocurrency options exchange, accounting for $5.8 billion of the expiring options.

Luuk Strijers, chief executive of Deribit, estimated that about 20% of such contracts were “in the money” as of Wednesday. However, this distribution has been unequal, with almost 28% of call options and 9% of put options in the money.

However, traders are also watching the release of the personal consumption expenditures (PCE) report from the U.S. Bureau of Labor Statistics, set for Friday. The PCE report, which measures the prices of everyday goods, is expected to show a 0.1% month-over-month increase and a 2.7% year-over-year rise, according to consensus estimates from FactSet.

The recent surge in the cryptocurrency also coincides with broader market trends following the Federal Reserve’s decision last week to cut interest rates. The move has helped not only Bitcoin but other digital assets and tokens to surge along with U.S. equities, as investors seem to regain their appetite for riskier assets.

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