Today marks a solid change for the bitcoin price. At the time of writing, the world’s number one cryptocurrency by market cap has jumped into the $7,200 range – a solid $200 boost from where the currency last stood.
Bitcoin Options Trading Is Growing
A lot of analysts are attributing this little surge to the fact that bitcoin options trading appears to have spiked in the last 48 hours. Over the past couple of days, many major exchanges – including Bakkt, OXEx and CME Group in Chicago – have reported additional bitcoin options trading on their platforms, bringing the total of the previous day to a whopping $86 million. This is the highest trading figure seen since mid-March according to data delivered from Skew.
In addition, it looks like most of the options trading is occurring abroad. Deribit, for example, is a crypto exchange based in Netherlands, and boasts the highest trading volume in terms of options availability. The recent figure saw contributions of more than 85 percent from Deribit. By contrast, CME Group in the United States only contributed about one percent to the total (less than $835K).
The jump in options trading can be attributed to many things, perhaps number one being the major halving that’s scheduled to occur on May 12. As it stands, bitcoin miners have lost several rewards over the past few weeks as bitcoin and other forms of crypto have lost mass amounts of value thanks to the growing coronavirus pandemic, and they’re about to lose even more now that rewards are going to be reduced from 12.5 BTC to 6.25 BTC.
Lennard Neo – head of research at Stack – explained in a recent interview:
Next month’s halving should serve as a catalyst for more bullish medium to long term price action.
Furthermore, higher rates of options trading can also be attributed to the idea that perhaps investors are starting to gain more confidence in digital currencies and other speculative assets. Previously, BTC and its altcoin cousins were being subjected to mass selloffs along with gold and precious metals that have ultimately proven themselves during times of crisis.
It was alleged that many people were looking to get rid of their assets as fast as they could to potentially get their fingers on cold, hard cash, which is still very much considered “king” when economic problems hit.
People Gain Faith in Crypto
However, now that money is being passed back and forth like nothing (either through stimulus checks or federal relief aid), people are beginning to lose the confidence they had in fiat and are turning to bitcoin and other crypto as a means of solidifying their wealth as cash and USD faces the prospects of inflation or overprinting.
All major coins have surged today, bringing the total crypto market cap to a whopping $204 billion.