Bitcoin has struggled to maintain its momentum in the second half of January after its huge start to the year.
The bitcoin price has flatlined (even as other, smaller cryptocurrencies continue to soar) as fears mount about a swelling bitcoin bubble.
Now, with excitement building ahead of a hotly-anticipated virtual “bitcoin corporate strategy” summit in the first week of February, a record near-$4 billion worth of bitcoin options are set to expire this Friday, January 29.
Bitcoin options contracts—allowing investors to buy or sell the cryptocurrency at a specified price within a set time period—worth around 107,000 bitcoin, or $3.5 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 $2.4 billion record, set in late December.
Trading data shows that speculators are feeling upbeat about bitcoin, despite recent surveys that have suggested Wall Street investors think bitcoin looks like a bubble. There is currently more open interest in “call options”—bets that the bitcoin price will rise—than interest in “puts”—bets the price will fall.
Bitcoin‘s looming record options expiry could spark a bout of price volatility, with previous large expiries catching investor attention and the size of the bitcoin open interest market recently soaring—more than doubling since the summer.
Bitcoin‘s surge higher over the last few months, climbing almost 250% since October, has failed to dampen its extreme volatility, with the bitcoin price regularly swinging more than 10% over a 24-hour trading period. The bitcoin price is currently over 20% off its early-January all-time high of just over $40,000.
Last week, survey data revealed investors are fearful bitcoin could halve over the coming year, with 50% of respondents to a Deutsche Bank survey giving bitcoin a rating of 10 on a 1-10 bubble scale. Bank of America
Elsewhere, analysts at Wall Street giant JPMorgan