Cryptocurrency traders around the world are bracing themselves for the expiration of $5 billion U.S. worth of Bitcoin (BTC) and Ethereum (ETH) options at the end of the current third quarter.
On September 29, a total of 1.217 million Bitcoin and Ethereum options contracts worth $4.8 billion U.S. at current levels will expire on leading cryptocurrency options exchange Deribit.
Roughly 10% of the options contracts are tied to Bitcoin, while the rest are options on Ethereum.
Options give investors the right to buy or sell a security at a pre-determined price at a later date. They typically involve betting that an asset’s price will either rise or fall in the future.
The options contracts will either be valuable or expire worthless depending on how the two biggest cryptocurrencies are trading at week’s end.
The expiration of the options contracts is expected to lead to enhanced volatility in Bitcoin and Ethereum in the coming days as investors and traders prepare to either make or lose money on their Q3 bets.
Bitcoin and Ethereum have largely been rangebound during the third quarter, with Bitcoin trading around $26,000 U.S. since mid-June and Ethereum trading between $1,550 U.S. and $1,650 U.S. in the same period.
