Live updates: Bitcoin trades near $86,000 as U.S. stocks post small gains
Reported by CoinDesk · AI-assisted summary by ChikoCorp AI News Desk
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Summary
Roughly $14 billion in bitcoin options are set to expire on Deribit on Friday, marking the largest single expiration this year. Mauricio Di Bartolomeo, co-founder of lender Ledn, states that a significant part of the impact has already occurred with last week's expiry of options tied to BlackRock's IBIT fund, which featured heavy call option activity and influenced bitcoin's price movement. The current options expirations on Deribit show concentrations of calls at $85,000 and $100,000, with bitcoin already trading above $85,000.
Why it matters
According to Di Bartolomeo, these large bitcoin options expirations drive price dynamics due to the hedging activity of dealers who sold call options. When the price exceeds strike prices, option sellers buy assets to cover losses, leading to additional buying pressure in both the ETF shares and underlying bitcoin. The source suggests this mechanism is a significant market driver during these quarterly expirations.
Key context
Last week's expiration of options related to BlackRock's IBIT fund represented the largest such event for that ETF, heavily weighted toward call options with a "maximum pain" price near $40 per share. This prior event contributed to bitcoin's price moving above $80,000, setting a precedent for the similar expirations on Friday. The connection between ETF share issuance and spot bitcoin purchases is a key mechanism in the described price effects.
Key numbers and entities
Mauricio Di Bartolomeo (Co-founder of Ledn), Ledn (bitcoin-backed loan originator with over $10 billion in loans since 2018), BlackRock's IBIT fund, Deribit, $14 billion in bitcoin options expiring, call option strike prices at $85,000 and $100,000.
What remains unclear
The source does not establish the exact expected price movement or market reaction following Friday’s options expiration. It also does not provide information on other market participants' views or the broader crypto or macroeconomic context influencing bitcoin’s price at this time.