The last Bitcoin options before halving expire – what do you need to know?

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Around $15 billion worth of Bitcoin open interest is set to expire tomorrow, which is the last month to expire before the next BTC halving. For Derebit, Bitcoin positions expiring on March 29 represent approximately 40% of the platform’s $26.3 billion worth of total Bitcoin open interest

According to CoinGlass, approximately $15 billion worth of open interest in Bitcoin on derivatives exchanges CME, Derebit, OKX, Binance and Bybit is set to expire tomorrow,

This is the last month to expire before the next BTC halving. The current open interest indicates high institutional interest and deepening liquidity cannot be overstated. Before the last Bitcoin halving, which took place on May 11, 2020, open interest only reached $2 billion.

Now, ahead of the 2024 halving, options and futures open interest in the Bitcoin market have reached unprecedented levels. This implies a highly complex and liquid market. Institutional participation increased following the launch of a spot Bitcoin ETF in January. The expectations surrounding the halving and its potential impact on supply and price dynamics are more evident than ever.

Open interest is a measure of the notional value of derivatives contracts, such as futures and options. Traders use them to bet on the future price movements of assets (such as Bitcoin and stocks) or commodities (such as grains and natural gas).

The surge in open interest suggests that cryptocurrency traders are feeling particularly optimistic in the final weeks leading up to the next Bitcoin halving, which currently appears to be happening in 23 days on Saturday, April 20.

The rewards paid to miners are cut in half after every 210,000 blocks processed by the Bitcoin network – hence the name Bitcoin halving. This is an anti-inflationary measure that increases Bitcoin’s scarcity approximately every four years, usually triggering a price increase as well.

But it’s not always easy to gauge how traders will feel about the halving of open interest. The first Bitcoin futures platform, ICBIT, appeared in 2011, but it did not attract much attention from the market. Therefore, when the first Bitcoin halving occurred on November 28, 2012, BTC was still very much an experimental technology with a small investor base.

But when the third halving occurred on May 11, 2020, investors were still in the shadow of the global pandemic, which seemed to highlight Bitcoin’s appeal as “digital gold.” This is the first time Bitcoin futures and options have seen significant open interest, signaling deepening market liquidity and a broadening of the investor base. Institutional interest is starting to heat up as Bitcoin's market capitalization tops $1 trillion for the first time.

Even so, the current open interest is still seven times the $2 billion worth of open interest before Bitcoin’s 2020 halving. #BTC #ETH（二饼） #ETHFI⁩ #DOGE #PDA