Cryptoverse: Is bitcoin out of the woods? Consider the options

Have bitcoin and ether finally turned a corner? It’s looking that way, if crypto options traders are anything to go by. The volume of bitcoin options traded on Deribit, one of the leading exchanges for crypto-focused derivatives products, jumped 82 per cent in January versus December, according to crypto market maker OrBit Markets. Ether options swelled 38pc. More investors are positioning for price gains, with the volume skewed to bullish call options — paying a premium for an option to buy bitcoin or ether at a future date and agreed price — rather than the conversely bearish put options to sell. Calls commanded 71.1pc of total bitcoin futures open interest, and 77.5pc for ether, according to Deribit data. “You’ve actually seen a couple people trading in $50,000 calls, for example, that’s been the general appetite that we’ve seen — just increased appetite for upside,” said Chinedu Ume-Ezeoke, quantitative research analyst at data firm Laevitas. Yet the surge in volumes also indicates investors are in two minds about the direction of crypto markets, preferring low-risk, low-reward options to actually buying bitcoin or ether. The surge in the options markets, after months of tame trading and depressed volatility, coincides with a 40pc leap in the price of bitcoin in January — its best month since October 2021 — and a 32pc jump for ether.