Bitcoin options volume exceeds $1 billion for the first time

On December 16, Bitcoin broke through the $20,000 threshold for the first time since 2017, setting a new all-time high. According to Skew data, on December 16, Bitcoin options trading volume also exceeded $1 billion for the first time.

As Bitcoin continues to rise, Bitcoin options are reaching a new milestone. Bitcoin options are derivative contracts that give holders the right, but not the obligation, to buy or sell BTC at a predetermined price.
According to data from Skew, Bitcoin options trading volume surpassed $1 billion on Dec. 16. Skew announced the news on Twitter Thursday, noting that Bitcoin options “marked its first $1 billion in volume.”
Deribit, a major global crypto futures and options exchange, had the largest BTC options trading volume on the day at $879 million. The exchange has become the most popular BTC options exchange, dominating the Bitcoin options market.
Bit.com, a cryptocurrency derivatives exchange owned by Bitmain-backed financial services platform Matrixport, ranked second in BTC options trading volume that day. According to Skew data, Bit.com’s largest Bitcoin options trading volume accounted for about $84 million.
OKEx, a major global crypto exchange, is the third largest BTC options platform on the list, with the largest options trading volume of $62 million on December 16.
The Bitcoin options market has seen parabolic growth in 2020 as even weekly volumes have not reached the $200 million mark seen at the start of the year.
As volume grew, Bitcoin options open interest, or OI, also grew significantly. OI represents the total number of open contracts that have not yet been settled in the market. According to Skew data, Bitcoin options OI almost hit the $6 billion threshold on December 16, a significant increase from around $600 million in early January.
The OI of Bitcoin options has been rising steadily throughout 2020. As Cointelegraph previously reported, high OI rates are associated with increasing liquidity in options and a growing number of market participants. The surge in Bitcoin options OI may also be spurred by larger macroeconomic events, such as the hype around decentralized finance and the long-term impact of the Bitcoin halving on the market. Options are derivative instruments with a variety of possible uses, including providing insurance for existing positions against possible declines or speculating on prices with asymmetric risk-return characteristics.
As Bitcoin prices hit record highs, the volume of the Bitcoin options market hit a new record. On December 16, Bitcoin broke through the $20,000 threshold for the first time since 2017, setting a new all-time high. Since then, it has continued to grow, briefly rising to $23,500 on December 17. (Cointelegraph)