Bitcoin Volatility Expected as $328M in BTC Derivatives Expire Friday

CME Bitcoin futures and options markets are set to mature this Friday and traders are closely watching to see how spot prices will react to this event.

The contracts expire every two months and according to market analysts, they negatively influence BTC's price in spot markets.

As per the above chart, CME Bitcoin Futures open interest soared from a mere $130 million in late March to $386 million this month.

Options markets are an entirely different derivatives contract.

There are endless strategies traders employ, but in the most basic one the buyer of a call option can acquire Bitcoin for a fixed price on a predetermined date.

As recently reported by Cointelegraph, institutional investors' growing appetite for CME Bitcoin Options saw a 1000% increase in open interest.

Total open interest for the May 29 expiry options is currently sitting at 32,000 BTC, although only 19,000 BTC between $7,500 and $10,500 strikes which equates to a little over $170 million.

Interestingly enough, at CME, open interest for this Friday is almost entirely composed of call options.

An investor holding 1,000 BTC may have recently been spooked about Bitcoin's halving or the possibility of a price drop due to the decreasing hashrate.

If these investors decide to not roll over their positions, this would likely increase the odds of additional volatility during expiry.