Bitcoin Options Contracts Expiration Had Low Impact, Retail and Professional Investors Adopted Different Strategies

On Friday, June 26 35,000 BTC worth of options contracts expired on the CME exchange, an event which many worried would usher in a new wave of volatility. 

For months, Bitcoin has been range-bound between $8,800 and $10,000. The majority of CME contracts held 5 BTC and were call options, indicating that purchasers expected for Bitcoin's price to go up. However, when expiration day came around it affected the market less than some had expected with minimal price fluctuations recorded.

PC: Ecoinometrics

A recent report from Econometrics argued that the derivatives market is following a beat behind the spot market, which is driven by investors afraid of missing out on Bitcoin price jumps and whale investors. It added that things like a whale liquidating their assets or filling a big Bitcoin order are what cause large BTC price swings with derivatives movements being fairly inconsequential.

Interestingly, retail investors and "smart money" investors took different approaches to handling the options expiration. Retail players went long, while "smart money" started selling. This indicates that professional investors are looking for short-term profit while retail buyers are true Bitcoin believers. 

This trend plays out in the spot market as well. Following Bitcoin's price drop on Thursday, March 12 addresses holding small amounts of Bitcoin grew while the "smart money" crowd backed away. Post-options expiration there are 16,510 BTC worth of open positions. 

By Emily Mason

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