Amid an ongoing Bitcoin (BTC) boom, Bitcoin options hit a new historic milestone. Bitcoin options are derivative contracts that give the holder the right, but not the obligation, to buy or sell BTC at a set price.
According to data from Skew, the volume of Bitcoin options was over $ 1 billion as of December 16. Skew posted the news on Twitter Thursday, noting that bitcoin options were seeing their “first day at $ 1 billion.”
Deribit, a major global crypto futures and options exchange, had the largest BTC options volume on the day at $ 879 million. The exchange has emerged as the most popular BTC options exchange and has historically dominated the Bitcoin options market.
Bit.com, the cryptocurrency derivatives exchange of the Bitmain-backed financial services platform Matrixport, recorded the second largest volume of BTC options that day. According to Skew, Bit.com’s maximum bitcoin option volume was around $ 84 million.
Major global crypto exchange OKEx is the third best BTC options platform on the list. The maximum option volume on December 16 was $ 62 million.
The Bitcoin options market saw parabolic growth in 2020 as even the weekly volume fell below the $ 200 million mark at the start of the year.
The growth in volume is accompanied by a massive increase in open positions in Bitcoin Options (OI), which represent the total number of outstanding and pending contracts in the market. According to Skew, the OI of bitcoin options almost hit a threshold of $ 6 billion on December 16, after rising from around $ 600 million in early January.
The OI for Bitcoin options has steadily increased over the course of 2020. As previously reported by Cointelegraph, high OI rates are related to the increasing liquidity of options and the growing number of market participants. Spikes in the OI of Bitcoin options can also be fueled by larger macroeconomic events like the decentralized financial hype and the long-term impact of the Bitcoin halving on markets. Options are a derivative instrument with multiple uses, including insuring existing positions against possible price losses or speculating on price with an asymmetrical risk-return profile.
New record volumes will emerge in the Bitcoin options market when Bitcoin price hits its new historical highs. On December 16, Bitcoin hit a new record high, crossing the $ 20,000 mark for the first time since 2017. The largest cryptocurrency continued to gain momentum, temporarily rising to $ 23,500 on December 17th.