Crypto Derivatives Market Roars as ETF Approval Looms

Amidst a cryptocurrency resurgence, derivatives’ demand surges, signaling investor anticipation and shifting strategies in the crypto landscape.

Robot playing the drums of Bitcoin & ETF.
Created by Kornelija Poderskytė from DailyCoin
  • Traditional investors have fueled a surge in Bitcoin options, but a recent expiry has failed to deliver the expected volatility.
  • Growing optimism has surrounded the potential approval of spot Bitcoin ETFs.
  • Surging trading volumes have reflected heightened interest in both spot Bitcoin and derivatives.

This year’s remarkable rebound in cryptocurrency prices has ignited a surge in demand for digital asset derivatives, particularly options and futures. This surge is being driven by traditional institutional investors seeking to position themselves ahead of the upcoming decision by US regulators on whether to approve or reject exchange-traded funds (ETFs) that invest directly in Bitcoin.

Bitcoin Options Trading Hits All-Time High

Data from The Block indicated that trading volume for Bitcoin options had reached an all-time high. Deribit, the largest crypto-options exchange, witnessed its largest-ever quarterly expiry on Friday, with options with a notional value of $11 billion having expired. This includes $7.7 billion in Bitcoin contracts and $3.5 billion in Ether options.


Despite expectations of heightened activity, the recent Bitcoin options expiry failed to deliver significant volatility, with the max pain point falling well below current market prices. Instead, market participants are now eagerly awaiting the outcome of upcoming decisions regarding Bitcoin spot ETFs, which could profoundly impact the crypto landscape.

The crypto market’s remarkable resilience in 2023, with Bitcoin surging nearly 160%, starkly contrasts the tumultuous events of 2022. This rebound is partly attributed to growing optimism surrounding the potential approval of spot Bitcoin ETFs, which would open up the asset class to a wider range of institutional and retail investors.

Spot and Derivatives Trading Volumes Surge

Trading volumes for spot Bitcoin and derivatives have surged in recent months, reflecting the heightened interest in the crypto market. This surge is particularly evident in perpetual futures, a popular instrument among crypto traders seeking to leverage their positions. The substantial premium these futures are trading at compared to spot prices further underscores the growing demand for exposure to Bitcoin.

While the focus remains on spot Bitcoin prices, the derivatives market is a crucial gauge of investor sentiment and risk management strategies in the fast-evolving crypto landscape.

On the Flipside

  • Dependency on regulatory decisions, such as approving Bitcoin spot ETFs, creates a volatile environment.
  • The substantial premium at which perpetual futures trade compared to spot prices might indicate an overheated market.

Why This Matters

Investors remain cautiously optimistic as the crypto market braces for the impending decisions on Bitcoin spot ETFs. The potential approval of these ETFs could further legitimize the cryptocurrency sector and attract a flood of new capital, potentially propelling Bitcoin and other digital assets to even greater heights.


To learn more about Bitcoin’s resilience as the year-end approaches, read here:
DailyCoin Bitcoin Regular: BTC Holds Strong as Year-End Approaches

To explore ARK Invest’s $100M investment in a Bitcoin ETF following GBTC’s dump, read here:
Ark Invest Injects $100M into Bitcoin ETF after GBTC Dump

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Kyle Calvert

Kyle Calvert is a cryptocurrency news reporter for DailyCoin, specializing in Ripple, stablecoins, as well as price and market analysis news. Before his current role, Kyle worked as a student researcher in the cryptocurrency industry, gaining an understanding of how digital currencies work, their potential uses, and their impact on the economy and society. He completed his Masters and Honors degrees in Blockchain Technology within Esports and Business and Event management within Esports at Staffordshire University.