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<\/p>\nThis Friday, January 29th, is a pretty big day for bitcoin as numerous derivatives are set to expire.<\/p>\n
First there’s the “monster expiry” of 100,000 bitcoin options contracts worth more than $3 billion.<\/p>\n
That’s the biggest ever, with it to be seen what effect it will have on bitcoin’s price. <\/p>\n
By comparison, on the Friday of last month, bitcoin’s price rose from $23,000 to $27,000 the next day.<\/p>\n
That happened to be after a week of sidewaying as well, with CME futures set to expire this Friday too.<\/p>\n
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CME is handling significant volumes with their biggest day being January 11th when bitcoin fell, suggesting perhaps they’re mainly short.<\/p>\n
On that day some $4.4 billion worth of contracts were traded, probably its biggest ever.<\/p>\n
Those contracts are now set to expire, meaning they will have to close their position. <\/p>\n
As such, if they were mainly short then presumably they will have to buy bitcoin to cover their short.<\/p>\n
Except here it is paper futures but to cover liabilities you’d think they’d hedge with the actual spot asset. Hence how derivatives can potentially affect the spot price.<\/p>\n
As it happens on Friday 29th the GME short contracts expire as well. Making it potentially a volatile day on the stock market too. <\/p>\n
Which way that volatility will mainly go remains to be seen, but once these contracts clear off, Saylor then opens the month with a bitcoin conference while ethereum sees the launch of its own futures on CME.<\/p>\n
Meaning the way could be cleared after some sideways, with the biggest question being whether the market thinks positively or otherwise – or doesn’t care at all – about these massive contract expiries. <\/p>\n