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the volatility of Bitcoin

2020.06.12

In recent months, the last Friday of the month was an important date for BTC investors as the Bitcoin futures on the CME expired on that day. The new Bitcoin options on the CME could make this “fixed” date more variable. Information on early orders could determine how backseat investors decide to enter positions.The influence that the CME Bitcoin futures might have was shown yesterday by Skew Markets in a tweet on Deribit’s Bitcoin options. In the chart the analysis company shows the chronological course of the Open Interest in the last year. Ironically, Skew Markets asks its followers if they can say what the “quarterly, monthly and weekly expiry dates are”.

With the announcement, Bakkt had virtually triggered an race with the CME. It seems that both companies see great potential in their trading operations with Bitcoin (BTC). The question is how the Bitcoin options from Bakkt and the CME will affect the Bitcoin price.On this question, it is important that Bakkt will offer its BTC futures options with a physical delivery of BTC at the end date of the contract, while the CME has announced only cash-based Bitcoin futures options.

The present looks somewhat different than December 2017. Since the end of June, Bitcoin has recorded a downward trend with the price falling from USD 13,000 to currently around USD 7,300. The market has generally calmed down somewhat. In particular, institutional investors currently have a much greater choice when it comes to investing in Bitcoin.

Nevertheless, the Bitcoin Futures Options could provide for a further increase in volatility in the Bitcoin market. This is due to the nature of option contacts. While futures contracts require the holder to sell on the expiration date, Bitcoin option contracts do not require the holder to sell on expiration. This leads to more flexibility for investors. However, this could also increase the volatility of the market.

作者 : Jake Simmons