Deribit Crosses $1 Billion in Bitcoin Options Open Interest Historic High


Crypto derivatives exchange Deribit, has seen a significant spike in the volume of open positions of Bitcoin on its platform. The exchange reached a new high of $1 billion on May 19, according to data from research and analytics company, Skew.

The latest creation is due to a combination of many variables, such as a large number of stakeholders, as per Deribit ‘s chief enforcement officer Luuk Strijiers:

“The current track is influenced by market optimism, an increasing number of wide and varied international players on Deribit and the efforts made by our multiple stakeholders and us to provide the maximum financial performance, credibility and connectivity and trading alternatives at all moments to a top-quality market.”

Deribit has seen a year-over-year growth trading options of 270 percent in 2020 alone. Last week the average volume of trading also approached $100 million, setting a new high for the last two months. The volume of daily trading also increased by 170 percent in 2020.

Deribit presently has derivative Bitcoin and Ether futures, worth more than $1.3 billion. Bitcoin options represent 74 percent of the total.

Deribit declared its intention, later in January, to transfer its base from Amsterdam. The firm said that it was compelled to do so because the Netherlands intended to introduce new EU rules which will have an impact on the business.

Growth and Trading Target
Open-interest growth is driven mainly by options that expire next month. More than 40,000 contracts that expire on June 26, 2020, are open as of Wednesday.

Options are often more complex than futures contracts since their price depends on some factors such as volatility, expiry time, risk-free interest rate, etc. Further, as expiry nears, options begin to lose appeal.

Futures contract pricing is much easier to understand. As a consequence, futures are much more widely known unlike options, and generally see the higher open interest. In the case of Deribit though, the activity of options is much higher.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.