Bitcoin Bulls Betting Big as Options Open Interest Skyrockets Past $10 Billion

In the Brief:

  • Bitcoin options OI surpasses that of futures contracts due to traders betting on higher BTC prices
  • Glassnode reports growing demand for Bitcoin as a store of value and hedge against inflation, with an all-time high of non-zero Bitcoin addresses indicating better on-chain activity.

3 - 5 minute read

Bitcoin bulls are starting to bet big on higher BTC prices as open interest for options skyrockets, according to analytics firm Glassnode.

Options OI reflects the total dollar value of all options contracts that have not been settled. In this case, Glassnode says the soaring OI stems from traders buying up large amounts of call options in Bitcoin, which give them the right to buy BTC at a certain price regardless of the actual spot price.

“For the first time, the amount of Open Interest in Bitcoin Options contracts ($10.3 billion) has surpassed that held in Futures contracts ($10.0 billion).

Futures OI has been relatively flat in 2023.

This results from significant call option buys, as investors start to speculate on higher BTC prices.”

Bitcoin options have seen significant growth in open interest as call buys drive traders to bet heavily on a rise in Bitcoin prices. This has resulted in the OI of Bitcoin options surpassing that of futures contracts for the first time in history.

Source: Glassnode/Twitter

Glassnode previously reported on Bitcoin miners’ fee revenue, which gauges activity on the Bitcoin blockchain based on the amount of fees that miners are collecting. The metric is currently flashing signs that demand is growing for Bitcoin, according to the firm.

“Currently, the 90-day [simple moving average] for fees is outpacing its yearly average, suggesting new demand is entering the market.”

Glassnode is also reporting that the number of non-zero Bitcoin addresses has jumped to an all-time high of about 45.5 million.

“This suggests the degree of on-chain activity is currently improving.”

These developments in the cryptocurrency markets are bringing attention to Bitcoin from investors, as traders look to capitalize on the positive indicators shown in Glassnode’s reports. Among these investors are trader Richard Patrick, who stated that “the high open interest reflects a growing demand for Bitcoin as a store of value and a hedge against inflation.”

While these developments may excite Bitcoin bulls, some caution is still necessary for traders looking to capitalize on these indicators. Glassnode cautions that it is still too soon to predict the trend of the cryptocurrency markets with certainty, stating that “while current indicators suggest growth, the market is still subject to volatility and uncertainty.”

However, it is clear that the trends identified by Glassnode are an early indicator of growing interest in Bitcoin, and traders will be keeping a close eye on these metrics in the near future.

As such, traders are advised to be cautious about placing their bets on the market, as Bitcoin’s volatility and uncertainty can result in significant losses for uninformed traders. However, those looking to take advantage of these early indicators should consider investing in Bitcoin to take advantage of potential future growth.

It seems that the growing OI in Bitcoin options contracts and the increasing demand for Bitcoin miners’ fees serve as a strong indication that Bitcoin is becoming an increasingly popular asset for traders and investors.

Disclaimer: The content in this article is provided for informational purposes only and should not be considered as financial or trading advice. We are not financial advisors, and trading carries high risk. Always consult a professional financial advisor before making any investment decisions.

Leave a Reply

Your email address will not be published. Required fields are marked *