Bitcoin options contracts—which allow investors to buy or sell the cryptocurrency at a specified price within a set time period—worth around 100,000 bitcoin, or almost $6 billion at today's prices, will expire on Friday, according to data from cryptocurrency analytics provider bybt.com. This coming options expiry is significantly more than the previous $4 billion record, set in late January.
"The expiry data suggests a bullish outlook," says Pankaj Balani, the chief executive of the Singapore-based Delta bitcoin and cryptocurrnency exchange, speaking over the phone.
Trading data shows that speculators are feeling upbeat about bitcoin. There is currently more open interest in "call options" (bets that the bitcoin price will rise) than in "puts" (bets the price will fall).
"There is a higher OI build up on puts than on calls, as options writers remain more comfortable selling the downside than writing the upside," says Balani. "On the downside, the highest buildup is on $40,000 strike puts for the march expiry. $40,000 also remains the most sold strike for the June expiry and for longer maturities."
Elon Musk, the Tesla billionaire and outspoken bitcoin supporter, raised eyebrows among investors when he added $1.5 billion worth of bitcoin to his electric car company's balance sheet last month.
"$40,000 has become a strong psychological level for traders, as this is the level at which bitcoin took a big leg up post the news of Elon Musk's $1.5 billion buying."