Bitcoin Options Expiry Looms Amid Market Volatility; Block Inc's Reinvestment Plan; Binance Trial Delayed
Summary:
Options contracts totaling $2.4 billion for Bitcoin and Ether are set to expire on May 3, potentially increasing market volatility. Block Inc. plans to invest 10% of its monthly Bitcoin-related profits back into the cryptocurrency. The money laundering trial of Binance executive in Nigeria has been postponed until May 16.
An imminent expiry of options contracts for Bitcoin and Ether, worth a combined total of $2.4 billion, signals anticipated increase in financial market volatility. Block Inc. has made a commitment to reinvest 10% of its gross monthly income from Bitcoin ventures back into the same cryptocurrency. Meanwhile, a Nigerian judge has decided to adjourn the trial of the Binance executive accused of money laundering.
Bitcoin and Ether options contracts, with a market value of $2.4 billion, are due to expire on May 3. Such events historically suggest an impending uptick in market instability. Bitcoin options contracts are derivative contracts enabling speculation on Bitcoin price fluctuation without actual Bitcoin ownership. These come in two forms: 'Put' and 'Call' options. 'Call' options permit investors to buy at a set price before a specified date, whilst 'Put' options allow investors to sell before the contract expires.
On May 3, 23,367 contracts equivalent to $1.39 billion for Bitcoin will reach expiration. Stats from Deribit show the put-to-call ratio for Bitcoin options is present at 0.5 with a max pain point of $61,000. This max pain point signifies the asset price that will incur maximum financial losses for most contract holders.
In a similar vein, 334,248 Ether contracts, with a financial value of $1 billion, are also set to expire on May 3. Contract expiry traditionally corresponds with short-term fluctuation of spot crypto market prices. Both Bitcoin and Ether's markets have experienced bearish trends in recent weeks.
Twitter co-founder Jack Dorsey's company, Block Inc., announced that it will be re-channelling 10% of its gross monthly Bitcoin product profits into buying Bitcoin.
Dorsey outlined the company's intent to reinvest 10% of all gross profits it makes from Bitcoin back into the cryptocurrency on a monthly basis.
Being one of the pioneer public companies investing in Bitcoin, Block initially purchased Bitcoin worth $220 million through Q4 of 2020 and Q1 of 2021. The company views Bitcoin as an investment towards a future driven by economic empowerment rather than merely a technological best.
Block's gross Bitcoin profits for the first quarter of 2024 were reported at $80.1 million, showing an approximately 60% increase from the previous year. If Block invests 10% of this figure into Bitcoin, it could buy roughly 1,350 BTC considering its current price.
In Nigeria, the money-laundering trial of Binance executive Tigran Gambaryan who was detained in Nigeria since February 2024, has been stalled until May 16. The trial was originally slated to commence on May 2nd, but Binance's defense attorneys requested a preliminary postponement allowing them more time to access vital case documents. Gambaryan, alongside Binance regional manager Nadeem Anjarwalla, visited Nigeria on legal matters when they were detained for money laundering and alleged tax evasion. Anjarwalla reportedly broke custody and escaped from Nigeria.
Published At
5/3/2024 3:56:56 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.