Friday’s $540M Ethereum options expiry favors traders with targets at $5K

November 3, 2021 Coin Telegraph

Friday’s 0M Ethereum options expiry favors traders with targets at K

$540 million in ETH options expire on Friday and data shows bulls have a good chance at securing the $5,000 level.

Ether (ETH) bulls are probably very pleased with the 368% gains accrued so far in 2021 and it seems like not a day passes where the altcoin doesn’t hit a new all-time high.

Even with Ether on the path to $5,000, there are still plenty of concerns about the network's capability to absorb the strong demand coming from the decentralized finance (DeFi) and non-fungible token (NFT) sector.

Another potential setback laying ahead is the United States Treasury report on stablecoin regulation released on Nov 1. The report stressed the necessity of Congress to "ensure appropriate federal prudential oversight on a consistent and comprehensive basis."

In addition to this, competing networks offering interoperability with major DeFi projects have been gaining adoption, both in total value locked (TVL) and market share on smart contracts. As an example, this week Solana (SOL) rallied to a new $236 record high, surpassing Cardano (ADA) to become the fourth-largest cryptocurrency.

According to data from CryptoSlam, secondary sales of Solana NFT markets reached $495 million over the past three months but despite this, the Ethereum blockchain remains the most popular, with NFT secondary sales topping $1.76 billion in October.

*Ether price on Coinbase in USD. Source: TradingView*

By managing to stay ahead of the competition and creating a path to solve the scalability problem by migrating to a proof of stake network, Ethereum has lured some heavy investors. This includes Dallas Mavericks owner Mark Cuban, the Houston Firefighters' Relief and Retirement Fund, and billionaire Barry Sternlicht.

The November 5, $540 million Ether options expiry may appear to be an uncontested victory for bulls, but this wasn’t the case a couple weeks ago.

*Ether options aggregate open interest for Nov. 5. Source: Bybt*

At first sight, the $300 billion put (sell) options dominate the weekly expiry by 20% compared to the $240 million calls (buy) instruments. Still, the 0.80 call-to-put ratio is deceptive because the recent rally will likely wipe out most bearish bets.

For example, if Ether's price remains above $4,500 at 8:00 am UTC on Nov 5, only $1.5 million worth of those put (sell) options will be available at the expiry. There is no value in a right to sell Ether at $4,500 if it's trading above that price.

Bulls are comfortable above $4,500

Below are the four most likely scenarios for the $540 million Nov. 5 expiry. The imbalance favoring each side represents the theoretical profit. In other words, depending on the expiry price, the quantity of call (buy) and put (sell) contracts becoming active varies:

Between $4,300 and $4,400: 6,870 calls vs. 6,000 puts. The net result is balanced between bulls and bears.
Between $4,400 and $4,600: 13,750 calls vs. 350 puts. The net result is $60 million favoring the call (bull) instruments.
Between $4,600 and $4,700: 18,500 calls vs. 50 puts. The net result is $85 million favoring the call (bull) instruments.
Above $4,700: 22,800 calls vs. 0 puts. The net result is complete dominance, with bulls profiting $107 million.

This crude estimate considers call options being used in bullish bets and put options exclusively in neutral-to-bearish trades. However, this oversimplification disregards more complex investment strategies.

For instance, a trader could have sold a put option, effectively gaining a positive exposure to Bitcoin above a specific price. But, unfortunately, there's no easy way to estimate this effect.

Bears need a 6% price correction to reduce their loss

The only way for bears to avoid loss on Friday's expiry is by pressuring Ether price below $4,400 on Nov. 5, down 6% from the current $4,660. So unless there is some concerning news or events announced before the weekly options deadline, bulls are likely to profit $85 million or higher.

Traders also have to factor in that during bull runs, the amount of effort a seller needs to impact the price is immense and usually ineffective. Currently, options markets data point to a considerable advantage from call (buy) options, fueling bullish bets for Ether and this increases expectations of a rally to $5,000.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Derivatives Exchange Giant CME Group Announces Micro Ethereum Futures Launch

November 2, 2021 Bitcoin.com

CME introduces micro Ether futures as ETH nears ATH above $4,4K

November 2, 2021 Coin Telegraph

CME introduces micro Ether futures as ETH nears ATH above ,4K

bitcoin futures

Micro Ether futures will become the fourth crypto derivatives product by CME and is expected to be launched on Dec. 6.

The Chicago Mercantile Exchange (CME), one of the world’s biggest derivatives marketplaces, continues expanding its cryptocurrency derivatives offerings by adding a new Ether (ETH)-based product.

CME announced Tuesday that it is planning to launch a micro Ether futures contract, sized at 0.1 ETH, enabling a new type of Ether exposure to institutional and individual traders.

The new product will become the fourth crypto derivatives product ever launched by CME and is expected to be rolled out on Dec. 6, 2021, pending regulatory approval.

The news comes amid Ether sitting near all-time high levels after the cryptocurrency posted its highest historical price on Friday, reaching $4,460. At the time of writing, the second-largest cryptocurrency by market cap is trading at $4,438, according to data from cryptocurrency tracking website CoinGecko.

Tim McCourt, CME Group Global head of alternative investment products, noted that the launch of micro ETH futures aims to bring more investors to the market by enabling smaller investments.

“Since the launch of Ether futures in February, we have seen steady growth in liquidity in these contracts, especially among institutional traders,” McCourt noted, adding that ETH price has “more than doubled” since these contracts were introduced.

“Micro Ether futures will offer even more choice and precision in how they trade Ether futures in a transparent, regulated and efficient manner at CME Group,” he added.

Micro Ether futures will join CME Group’s growing offering of crypto derivatives, including Micro Bitcoin futures, which started trading in May 2021. With each contract worth 0.1 BTC, the company has traded over 2.7 million contracts so far. The original and the first Bitcoin futures contract by CME was launched on Dec. 17, 2017.

Ethereum shillers call for $5K ETH, and this time derivatives data is backing them up

November 1, 2021 Coin Telegraph

Ethereum shillers call for K ETH, and this time derivatives data is backing them up

basis

Ether bulls have been calling for $5,000 ETH for years, and now derivatives data suggests that the price is finally realistic.

Ether (ETH) pundits have been shouting that the $5,000 price is 'programmed,' since 2018 and some go even further by calling for $20,000 over the long-term.

$5000 $ETH.

It is programmed.
— Koroush AK (@KoroushAK) October 29, 2021

A portion of these bullish calls are based on ETH 2.0 staking and the reduced inflation resulting from EIP-1559.

At this time in 2017, $BTC was around $2k

Just 7 months later it was almost $20k

What do you think happens when the world wakes up to the APR and deflationary aspect of $ETH that is coming in less than 2 months?

$20,000 is programmed IMO

This should be your largest position
— Don't Follow Shardi B If You Hate Money $ (@ShardiB2) May 16, 2021

The $20,000 estimate is equivalent to a $2.36 trillion market capitalization, and even if it is feasible, it still seems excessively optimistic for now.

Ether has entered an ascending channel on Sep. 20, which points to $5,000 becoming a support level by late Nov.

*Ether price in USD at Kraken. Source: TradingView*

Backing the recent strength is the net value locked growth, or adjusted TVL, on Ethereum network smart contracts. TVL measures the assets deposited on decentralized applications and is usually led by lending protocols and DEX exchanges.

*Ethereum network adjusted total value locked (TVL) in USD. Source: DeBank.com*

Ether’s TVL breached the previous $71 billion all-time high on Oct. 16, accumulating a 50% gain in three months until Oct. 31.

Adverse regulatory winds coming from the United States lawmakers could be driving investors away from cryptocurrencies. Many U.S. states, including Kentucky, Texas, Alabama, Vermont, New Jersey and most recently, New York, have been cracking down on crypto lending.

Furthermore, in October, New York-based decentralized prediction market Polymarket came under investigation from the United States Commodity Futures Trading Commission (CFTC). According to a Bloomberg report on Oct. 23, the agency is evaluating whether the decentralized finance (DeFi) application allows its customers to trade binary options and swaps without the necessary regulator approval.

On the other hand, some investors expect a positive movement from traditional markets to further boost the rally. Data shows that November has been the best performing month for the S&P 500 since 1985.

Pro traders believe ETH price will move higher

To confirm investors' confidence in the $5,000 prophecy coming true, one should monitor the monthly contract's premium, known as "basis." Unlike the perpetual contract, these fixed-calendar futures do not have a funding rate, so their price will vastly differ from regular spot exchanges.

By measuring the expense gap between futures and the regular spot market, a trader can gauge the level of bullishness in the market. Whenever there's excessive buyers optimism, the three-month futures contract will trade at a 15% or higher annualized premium (basis).

*Ether 3-month futures basis rate. Source: Laevitas.ch*

Notice how not even the 9.5% correction on ETH price on Oct. 27 from $4,300 to $3,900 was enough to break those traders' spirits. Currently, the basis rate stands at 17%, which signals moderate bullishness.

Options markets show moderate bullishness

Ether made an all-time high at $4,460 on Oct. 29 and to determine how optimistic traders are we have to look at the 25% delta skew. This indicator provides a reliable "fear and greed" analysis by comparing similar call (buy) and put (sell) options side by side.

The metric will turn positive when the neutral-to-bearish put options premium is higher than similar-risk call options. This situation is usually considered a "fear" scenario. On the other hand, a negative skew translates to a higher cost of upside protection and points toward bullishness.

*Deribit Ether 60-day options 25% delta skew. Source: laevitas.ch*

The above chart shows the indicator at negative 9, flirting with the "greed" momentum. That optimistic stance started on Oct. 18, which wasn't exactly a positive day for Ether because it tested the $3,700 support multiple times.

Both derivatives indicators sit on the edge of a neutral-to-bullish zone, which should be interpreted as highly positive as it leaves room for buyers' leverage using derivatives instruments.

According to futures and options metrics, perma-bulls calling for $5,000 are likely to be correct in the short term.

Bitcoin price descending channel and loss of momentum could turn $60K to resistance

October 31, 2021 Coin Telegraph

Bitcoin price descending channel and loss of momentum could turn K to resistance

bitcoin futures

After a slight hiccup in BTC futures premium, traders seem comfortable despite the $58,000 support retest and the risk of $60,000 turning to resistance.

Bitcoin (BTC) appears to lack the strength to retest the $67,000 all-time high that it reached on Oct. 20 and this is causing investors to question whether or not the bullish moment has faded. Even with the price facing these hurdles, it’s still premature to call the $58,000 support level test the beginning of a descending channel.

*Bitcoin price in USD at Coinbase. Source: TradingView*

Among the factors limiting the rally is the regulatory uncertainty in the United States. Anne Termine, a partner in the government enforcement and investigations practice at Bracewell LLP and former chief trial attorney at the Commodities Futures Trading Commission (CFTC), said that “there are no easy answers” for the agency to provide clear rules.

Increasing adoption, on the other hand, has been pressuring traditional banks to seek cryptocurrency product offerings. For example, major Russian private bank Tinkoff, owner of a large online brokerage services, is researching crypto-related investment services even though the Bank of Russia withholding such launches.

This week Coinbase exchange hit the top spot as the most downloaded app for the United Stated Apple Store, which is mind-blowing. Coinbase beat tech giants like TikTok, YouTube and Instagram and this is not a small feat. Coinbase first listed on the app store in 2014 and was the most popular download in the U.S. in 2017 and May 2021.

Pro traders stumbled but are bullish again

To determine how bullish or bearish professional traders are, one should monitor the futures premium — also known as the “basis rate.”

The indicator measures the difference between longer-term futures contracts and the current price at spot market exchanges. A 5% to 15% annualized premium is expected in healthy markets, otherwise known as contango.

This price gap is caused by participants demanding more money to withhold settlement longer, and a red alert emerges whenever this indicator fades or turns negative, known as “backwardation.”

*Bitcoin 3-month futures basis rate. Source: Laevitas.ch*

Notice how the sharp decrease caused by the $58,000 resistance test on Oct. 27 caused the annualized futures premium to reach its lowest level in three weeks. Still, the indicator recovered nicely to the current 17%, signaling a moderate bullishness.

To confirm whether this movement was specific to that instrument, one should also analyze options markets.

The 25% delta skew compares similar call (buy) and put (sell) options and will turn positive when “fear” is prevalent. That situation reflects the protective put options costing higher than similar risk call options.

The opposite movement holds when market makers are bullish, causing the 25% delta skew indicator to shift to the negative area. Readings between negative 8% and positive 8% are usually deemed neutral.

*Deribit Bitcoin options 25% delta skew. Source: laevitas.ch*

The 25% delta skew has been ranging in the neutral zone since Sep. 30. The latest bottom on Oct. 25 was negative 6%, not enough to be considered moderate bullishness. However, not even Bitcoin’s 12.5% correction from $66,600 on Oct. 21 to $58,200 on Oct. 28 was enough to inflict fear on professional traders.

Although no bearish signs emerged from the Bitcoin derivatives market, bulls should worry about the potential descending channel starting on Oct. 19. If that movement gets further confirmation, traders should expect $60,000 to become a resistance by Nov. 12.

There are no stress signs currently from professional traders, so a correction after a 63% rally in three weeks that led to the $67,000 all-time high on Oct. 20 should not be problematic.

Data shows Ethereum bulls expect a new ATH after Friday’s $1.25B ETH options expiry

October 28, 2021 Coin Telegraph

Data shows Ethereum bulls expect a new ATH after Friday’s .25B ETH options expiry

Altair

ETH price is on the cusp of a new all-time high and derivatives data shows bulls may attempt to capture it ahead of Oct. 29’s $1.25 billion Ethereum options expiry.

Ether (ETH) has gained 950% in 2021 and from the look of things, the altcoin has no intention of stopping. This can also be seen in the ultra-optimistic bets for October’s $1.25 billion options expiry. However, this phenomenon is not exclusive to Ether bulls.

The right to acquire Ether at a fixed price in the future does not come at a cheap price. On Sep. 4, the $5,000 call option for Oct. monthly expiry was trading at ETH 0.082 which is equivalent to $320. Unfortunately, for the bulls, these options are now worthless.

Gas fees on Ethereum transactions are still above $25 and this will continue to favor competitor blockchains with their own decentralized finance (DeFi) and nonfungible token (NFT) markets. Even with these high fees, the leading smart contract network still holds 80% or higher total value locked (TVL) and decentralized exchanges (DEX) volumes.

*Ether price at Coinbase in USD. Source: TradingView*

The bullish trend that initiated on Sep. 21 has been driving Ether price on a path to break its $4,380 all-time high in a couple of weeks.

Furthermore, Ether bulls will also be pleased to know that ETH 2.0's Altair upgrade was successful, with 99% of the nodes upgraded. This is the first upgrade since the Beacon Chain went online in December 2020 and the main changes include support for lightweight nodes and increased penalties for validators being offline.

Bulls were too optimistic, but they're still ahead

Based on the bullish expectations surrounding a Bitcoin (BTC) exchange-traded fund approval, it is now possible to understand why bulls placed 55% of their bets at $4,500 or higher. However, as the deadline for Oct. 29 expiry approaches, these call (buy) options quickly lost their value.

The October monthly expiry will be a strength test for bears because any price above $4,000 means a $205 million or higher profit for the bulls.

*Ether options aggregate open interest for Oct. 29. Source: Bybt*

As the above data shows, bears placed $535 million in bets for Oct. 29's expiry, but it appears that they were caught by surprise, as 96% of the put (sell) options are likely to become worthless.

In other words, if Ether remains above $4,100 on Friday's 8:00 am UTC expiry, only $12 million worth of neutral-to-bearish put options will be activated.

Bulls have a few reasons to keep Ether price above $4,200

Below are the four most likely scenarios for the Oct. 29 expiry. The imbalance favoring either side represents the theoretical profit. In other words, depending on the expiry price, the quantity of call (buy) and put (sell) contracts becoming active varies:

Between $3,900 and $4,000: 35,100 calls vs. 9,800 puts. The net result is $100 million favoring the call (bull) instruments.
Between $4,000 and $4,200: 54,900 calls vs. 3,600 puts. The net result is $205 million favoring the call (bull) instruments.
Above $4,200: 66,300 calls vs. 600 puts. The net result is $275 million favoring the call (bull) instruments.

This raw estimate considers call options being exclusively used in bullish bets and put options in neutral-to-bearish trades. However, investors might have used a more complex strategy that typically involves different expiry dates.

Bears need a 7% price correction to reduce their losses

In each scenario, bulls have absolute control of this Oct. 29's expiry and there is good reason for them to keep the price above $4,200. On the other hand, bears need a 7% negative move from $4,270 to sub-$4,000 to avoid a loss of $205 million or higher.

Nevertheless, traders must remember that during bull runs, the amount of effort a seller needs to pressure the price is immense and usually ineffective. Moreover, derivatives data shows a considerable short-term advantage from call (buy) options that is fueling even more bullish bets for next week.

Is excessive bullish optimism behind Bitcoin’s drop below $60K?

October 24, 2021 Coin Telegraph

Is excessive bullish optimism behind Bitcoin’s drop below K?

basis

Bitcoin’s futures premium hit its highest level in 5 months, but was this the primary reason for BTC’s fall below $60,000?

Bitcoin (BTC) has a long history of forming local tops when events that are anticipated by the market occur. The recent Bitcoin exchange-traded fund (ETF) launch on Oct. 19 was no different and led to a 53% monthly rally to an all-time high at $67,000.

Now that the price has briefly fallen below $60,000, investors are attempting to understand if the 10% correction was a healthy short-term profit taking or the end of the bull run. To determine this, traders need to analyze BTC's previous price activity to evaluate the possible similarities.

*Bitcoin price in USD. Source: TradingView*

The chart above depicts the day of a New York Times headline announcing that "Bitcoin gets cautious nod from China's central bank" in November 2013. At the time, Yi Gang, the deputy governor of the People's Bank of China (POBC), said that people could freely participate in Bitcoin's market. He even mentioned a personal view that suggested a constructive long-term perspective on digital currency.

It's also worth mentioning that this favorable media coverage on Chinese state-run television aired on Oct. 28, and it showed the world's first Bitcoin ATM in Vancouver.

Bearish events can also be anticipated

Bearish examples can also be found throughout Bitcoin's 12-year price action. For example, the April 2014 Chinese ban marked a 5-month price bottom.

On April 10, 2014, Huobi and BTC Trade, the two of China's largest exchanges, said their trading accounts at certain domestic banks would be closed within one week. Once again, rumors had been circulating since March 2014, and this was fueled by a note on the Chinese news outlet Caixin.

More recent events included the CBOE Bitcoin futures launch on Dec. 19, 2017, which preceded the infamous $20,000 all-time high by one day. Another event that marked a local top was the Coinbase IPO on Nasdaq when Bitcoin price reached $64,900. Both events are signaled on the following chart:

*Bitcoin price at Coinbase in USD. Source: TradingView*

Notice how all of the above events were largely anticipated, even though some did not have a precise announcement date. For example, Bitcoin's futures-based ETF's Oct. 19 initial trading session was preceded by SEC's Chair Gary Gensler's statement on Aug. 3 that the regulator would be open to accepting a BTC ETF application using CME derivatives instruments.

It's possible that investors had previously positioned themselves ahead of the ProShares Bitcoin Strategy ETF launch and a look at BTC's derivatives markets could possibly provide more insight into this.

The futures premium was not "exaggerated"

The futures premium, also known as the basis rate, measures the price gap between futures contract prices and the regular spot market. Quarterly futures are the preferred instruments of whales and arbitrage desks. Although it might seem complicated for retail traders due to their settlement date and price difference from spot markets, their most significant advantage is the lack of a fluctuating funding rate.

Some analysts have pointed to the "return of the contango" after the bais rate reached 17%,which was the highest level in 5 months.

pic.twitter.com/M7FNpnSRBV
— Dylan LeClair (@DylanLeClair_) October 20, 2021

In a normal situation, futures markets of any kind (soy, S&P 500, WTIl) will trade at a slightly higher price versus the regular spot market. That happens mainly because the investor needs to wait until the contract expires to collect his payout, so there's an opportunity cost embedded, and this causes the premium.

*Bitcoin 3-month futures annualized premium. Source: laevitas.ch*

Let's assume one does arbitrage trades, aiming to maximize the funds held in USD. This trader could buy a stablecoin and get a 12% annualized yield using decentralized finance (DeFi) or centralized crypto lending services. A 12% premium on the Bitcoin futures market should be deemed a 'neutral' rate for a market maker.

Excluding the short-lived 20% peak on Oct. 21, the basis rate remained below 17% after a 50% rally month-to-date. As a comparison, on the eve of Coinbase's stock launch, the futures premium skyrocketed to 49%. Therefore, those naming the current scenario as somehow excessively optimistic are just wrong.

Liquidation risks were also not "imminent"

Whenever buyers are overconfident and accept a steep premium for leverage using futures contracts, a 10% to 15% price drop could trigger cascading liquidations. However, the mere presence of a 40% or higher annualized premium does not necessarily translate to an imminent crash risk because buyers can add margin to keep their positions open.

As the main derivatives metric shows, a 10% drop from the $67,000 all-time high on Oct. 20 was not enough to cause any sign of worry from professional traders as the basis rate stood at a healthy 12% level.

Bulls target $100 Filecoin (FIL) after data points to improving fundamentals

October 18, 2021 Coin Telegraph

Bulls target 0 Filecoin (FIL) after data points to improving fundamentals

Chainmonsters

FIL might be more than 70% away from its all-time high, but derivatives data shows traders are steadily building leveraged positions.

Some traders have said that Filecoin (FIL) has lost its momentum because its current price at $64 is more than 70% below its all-time high at $238. However, this decentralized data-sharing platform is showing signs of increasing adoption and this could cause the FIL token price to accelerate its current uptrend.

The FIL token is used to purchase storage space and retrieve data from the Filecoin Network. At the same time, its users gain rewards for selling their excess storage using this open-source platform. To compete with existing centralized cloud storage services, Filecoin has economic incentives to ensure files are reliably stored over time.

Filecoin (FIL) price at Coinbase in USD. Source: TradingView

Notice how the past three weeks showed a potential reversion to the previous downtrend movement. That upward channel points to a $90 support by mid-November and resistance near $107, which would be a 55% gain from the current pricing.

Partnerships and adoption could pave the way to $100

On Sept. 14, Filecoin announced a referral program for users who bring members carrying datasets larger than 90 Terabytes. The network reached 9,000,000 Terabytes in August, and according to their website, there are over 3,000 systems and storage providers serving capacity to 400+ applications.

On Oct. 13, Filecoin announced a storage collaboration with Flow Blockchain, which is backed by Dapper Labs. The service will establish decentralized data storage for nonfungible tokens (NFTs), along with the media assets associated with them. Flow's platforms include Eternal, Starly, Versus and the upcoming multiplayer online game Chainmonsters.

More importantly, on Oct. 15, the daily release of Filecoin tokens will decrease by 23.8% to mark a year since the mainnet launched. Specifically, that affects the 7.5% stake held by early investors, equivalent to 150 million FIL tokens after the three-year issuing period.

*Filecoin future gregate open interest. Source: Bybt*

Since Sep. 30, Filecoin futures open interest has increased by 45%, signaling that investors' interest is finally starting to pick up. This metric represents the total number of contracts in play, regardless of whether they have actually been traded on a specific date.

Glass half full: The funding rate has room for buyers' leverage

To assess whether the market is leaning bullish, one should analyze the perpetual contracts funding rate. Even though buyers and sellers' open interest is matched at all times, leverage can vary. When buyers (longs) are demanding more leverage, the funding rate turns positive. Thus, they are the ones paying the fees to the sellers (shorts).

However, the opposite situation occurs when shorts require additional leverage, and this causes the funding rate to turn negative.

*Filecoin perpetual futures 8-hour funding rate. Source: Bybt.com*

The above chart shows a brief period of excessive buyers (longs) leverage building in early September as the funding rate reached 0.10% or 2.1% per week. More recently, Filecoin's funding rate surpassed 0.06% per 8-hour as FIL token struggled with the $80 resistance on Oct. 8 but failed to break through.

Currently, derivatives metrics show few signs that investors have abandoned Filecoin despite its price hanging 70% below the $238 all-time high. The recent partnership with Flow Blockchain, increasing network use and capacity, and the reduced token emission point to a possible continuation of the previous three-week uptrend. Nothing seems to be holding back FIL from reaching the $90 to $107 range in November.

ProShares Bitcoin ETF to debut on NYSE on Oct. 19

October 18, 2021 Coin Telegraph

Coin Telegraph

The first Bitcoin futures-linked ETF is finally launching in the United States after years of effort.

The first Bitcoin (BTC) futures-linked exchange-traded fund (ETF) in the United States, ProShares’ Bitcoin Strategy ETF, will begin trading on the New York Stock Exchange (NYSE) on Oct. 19 under the ticker BITO.

ProShares CEO Michael Sapir said the launch marks an important milestone for cryptocurrency ETFs in the United States following several years of effort to list one on an exchange:

“BITO will continue the legacy of ETFs that provide investors convenient, liquid access to an asset class. 1993 is remembered for the first equity ETF, 2002 for the first bond ETF, and 2004 for the first gold ETF. 2021 will be remembered for the first cryptocurrency-linked ETF.”

Sapir went on to say that the Bitcoin ETF’s debut on NYSE unlocks massive exposure for investors in traditional financial markets.

“BITO will open up exposure to Bitcoin to a large segment of investors who have a brokerage account and are comfortable buying stocks and ETFs, but do not desire to go through the hassle and learning curve of establishing another account with a cryptocurrency provider and creating a Bitcoin wallet or are concerned that these providers may be unregulated and subject to security risks,” he said.

The news comes shortly after the U.S. Securities and Exchange Commission (SEC) accepted the registration request for ProShares’ Bitcoin ETF on Oct. 15. On the same day, the SEC also accepted the registration request for shares of Valkyrie’s Bitcoin Strategy ETF for listing on Nasdaq.

This story is developing and may be updated.

Bitcoin bulls target prices above $58K ahead of Friday’s $820M options expiry

October 13, 2021 Coin Telegraph

Bitcoin bulls target prices above K ahead of Friday’s 0M options expiry

BTC Options

$820 million in BTC options expire on Oct. 15, and data signals that bulls are set to celebrate another positive week.

Everyone is talking about a six-figure Bitcoin (BTC) price now that the digital asset has broken out of its multi-month downtrend and confirmed that a bullish trend is in play.

If Bitcoin happens to enter a parabolic move toward $110,000, that would finally match PlanB’s Stock-to-Flow model prediction. According to the pseudonymous analyst , the scarcity and valuation of gold and other precious metals and “Elon Musk’s energy FUD and China’s mining crackdown” are a few of the factors responsible for the past five months of 50% or higher inaccuracy in the model.

Bulls’ hopes mostly cling to an exchange-traded fund being approved by the United States Securities and Exchange Commission. Currently, there are multiple requests pending review between Oct. 18 and Nov. 1, but the regulator could postpone its final decision.

Oct. 15’s $830 million options expiry was largely impacted by the 20% price rally initiated on Oct. 4, which most likely eliminated 92% of the put (sell) options.

*Bitcoin price on Coinbase in USD. Source: TradingView*

The aftermath of China’s mining crackdown was an important event that might have fueled investor sentiment, and research shows the U.S. accounting for 35.4% of the Bitcoin hash rate.

Furthermore, as Cointelegraph reported, the U.S. states of Texas and Ohio are also expected to receive additional large-scale Bitcoin mining centers, which will effectively boost the U.S. crypto market share even higher.

The Oct. 8 expiry was profitable for bulls

Following last week’s $370 million estimated net profit from the BTC options expiry, bulls had more firepower, and this is evident in this Friday’s $820 million expiry. This advantage explains why the call (buy) options open interest is 43% larger than the neutral-to-bearish put options.

*Bitcoin options aggregate open interest for Oct. 15. Source: Bybt*

As the above data shows, bears placed $335 million in bets for Friday’s expiry, but it appears that they were caught by surprise, as 92% of the put (sell) options are likely to become worthless.

In other words, if Bitcoin remains above $56,000 on Oct. 15, only $36 million worth of neutral-to-bearish put options will be activated on Friday’s 8:00 am UTC expiry.

Bulls have a reason to push BTC price above $58,000

Below are the four likeliest scenarios for Oct. 15’s expiry. The imbalance favoring either side represents the theoretical profit. In other words, depending on the expiry price, the quantity of call (buy) and put (sell) contracts becoming active varies:

Between $52,000 and $54,000: 3,140 calls vs. 2,110 puts. The net result is $55 million favoring the call (bull) instruments.
Between $54,000 and $56,000: 3,700 calls vs. 1,240 puts. The net result is $130 million favoring the call (bull) instruments.
Between $56,000 and $58,000: 4,850 calls vs. 680 puts. The net result is $235 million favoring the call (bull) instruments.
Above $58,000: 6,230 calls vs. 190 puts. The net result is complete dominance, with bulls profiting $350 million.

Bears need a 7% price correction to reduce their loss

In every scenario, bulls have absolute control of this Friday’s expiry, and there are a handful of reasons for them to keep the price above $56,000. On the other hand, bears need a 7% negative move below $54,000 to avoid a loss of $235 million or higher.

Nevertheless, traders must consider that during bull runs, the amount of effort a seller needs to pressure the price is immense and usually ineffective. Analytics point to a considerable advantage from call (buy) options, fueling even more bullish bets next week.

derivatives