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2023 was a particularly eventful year for the largest cryptocurrency Bitcoin (BTC), which saw a rise of over 160%, creating a dynamic environment for crypto investors. As we enter 2024, Bitcoin remains the favorite among investors eagerly awaiting the launch of the United States’ first spot Bitcoin ETF, although today could see an increase in volatility in the largest crypto and altcoin markets.
The Last Bitcoin Options of 2023 Expire Today
Today is an important day as the last Bitcoin options of 2023 expire before entering 2024. According to data from Greeks.Live, December 29 will be a significant expiration date for the crypto option market. Approximately 178,000 BTC worth of options will expire, with a Put Call ratio of 0.67. The options’ maximum pain point is at the $33,000 level, and the options represent a significant notional value of $7.59 billion.
Today’s expiration of $11 billion worth of Bitcoin options represents a significant peak. This figure is a considerable increase from last year’s total position of $9.8 billion on the corresponding annual expiration day. Moreover, the current volume is more than double the annual expiration volume observed during the same period last year.
The crypto market typically shows low volatility towards the end of each year, but the expectation of a Bitcoin ETF traded on the exchange receiving SEC approval in January could replace the low volatility environment with high volatility. Despite the usual trend of low volatility, the current general Implied Volatility (IV) level continues to remain relatively stable, thanks to the ETF developments expected next month.
In 2023, there was a noticeable influx of institutional investors into the crypto option and derivative markets, indicating a maturing market that is developing to accommodate a wider range of strategies, products, participants, and trading approaches.
Latest BTC Developments
Financial heavyweights like BlackRock are now preparing for the SEC to approve applications for a spot Bitcoin ETF. According to the tentative schedule, this approval could come around January 10, 2024.
On December 28, 2023, both Ark Invest and 21Shares took a significant step by making the fifth amendment to the S-1 form of their spot ETF applications. This move comes at a time when financial market expectations for the potential approval of a spot Bitcoin ETF are rising. The latest amendment focuses on changes to the terms governing the involved authorized participants.
Currently, the price of BTC is trading around $43,000. While some market analysts believe there could be a drop to $40,000 in the future, they consider it an important buying opportunity.
