Saturday, December 5, 2020
Home Decrypt News Bitcoin's Price Holds Steady After $1 Billion of Options Expire

Bitcoin's Price Holds Steady After $1 Billion of Options Expire

Bitcoin price remains steady, even though almost $1 billion in options expired yesterday and a hacker drew $150 million worth of cryptocurrencies from KuCoin, a major cryptocurrency exchange.

Despite all the tumult,  the price of Bitcoin held strong, increasing by 1.1% over the past day to $10,727, according to data by CoinMarketCap

And the stability persisted amid higher-than-usual trading volumes. On Thursday, trading volumes for the coin, which is the largest by market capitalization, doubled from $24 billion to $52 billion. Trading volumes have held relatively steady ever since.

So, why might more volatility have been expected? Two reasons, the first of which is the expiry of almost $1 billion worth of Bitcoin options, or about half of Bitcoin’s options contracts.

Bitcoin options are like futures contracts—way back in the past, people sign contracts to buy Bitcoin at a certain price at some point in the future. Ideally, Bitcoin will have increased in price, meaning that those signing the contracts secure Bitcoin at price below market value.

Futures contracts oblige the signatory to buy the Bitcoin upon expiry, whereas Bitcoin options contracts merely give them the option, with no obligation to purchase them.

As such, this could have been a major point of volatility, particularly if people dumped all that extra Bitcoin on the market. That could have caused price fluctuations. But, alas, this has not happened.

The second event that threatened the cryptocurrency market with volatility was yesterday’s KuCoin hack, in which hackers stole at least $150 million worth of Ethereum-based cryptocurrencies and an undisclosed amount of cryptocurrencies on other blockchains, among them Bitcoin.

Once again, hackers could have dumped these cryptocurrencies on the market, crashing it in the resulting chaos. But…this hasn’t affected Bitcoin.  

So, Bitcoin’s survived a crazy 24 hours. For now.

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

Popular Articles

Bitcoin Cash, Ontology, Enjin Price Analysis: 05 December

Bitcoin saw a dip from $19,500 to $18,500 in the past couple of days and was trading at $18,919 at the time of writing....

Crypto.com Gains Ability to Issue Cards in Australia

Prominent crypto fintech firm Crypto.com has disclosed plans to issue its debit cards in Australia. Crypto.com recently obtained an Australian Financial Service License (AFSL). This...

Who Has How Much Bitcoin?

Bitcoin and its underlying tech are some of the most popular financial innovations of the 21st century. The crypto has been touted as having...

It’s time to mature: We need compliant decentralized finance

The crypto space is an incredible, albeit risky, learning environment. Its volatility serves as a dire warning to those who like to test how...

Darknet Market Crypto Revenues Hit All-Time Highs in 2020

A study revealed that darknet markets have astonishing figures so far in 2020, despite the coronavirus pandemic, but the dynamics changed compared to the...

Introducing SINOVATE: The Future of Decentralized Cloud Storage

Decentralized cloud data storage platform SINOVATE is developing its own in-house blockchain technology known as Deterministic Infinity Nodes (DIN). The potentially groundbreaking new tech...