Massive $8.2B Crypto Options Expiry and Post-Verdict Recovery of TRUMP Token Amid Terraform Fraud Settlement
Summary:
Bitcoin and Ether options worth $8.2 billion are set to expire, which is typically associated with market volatility. The TRUMP token dipped 16% following Donald Trump's conviction in a hush money trial but bounced back quickly. Meanwhile, Terraform Labs and co-founder Do Kwon are finalizing a fraud settlement with the SEC, following allegations of misleading investors in the sale of crypto tokens like the now-defunct TerraUSD.
Bitcoin and Ether crypto options are on the verge of a significant event as contracts worth $8.2 billion are due to expire. The markets slightly stumbled after the conviction of Donald Trump in a hush money case in New York led the token to plunge by 16%, however, it has now rebounded back to its pre-conviction level. Concurrently, Terraform Labs and its co-founder Do Kwon are in the process of settling legal scrutiny from the United States Securities and Exchange Commission (SEC).
On the 31st of May, contracts for 69,000 Bitcoin (BTC) options valued at $4.7 billion and 920,000 Ether (ETH) options valued at $3.5 billion will come to an end. Notably, the expiry of such crypto contracts has a traditional association with price fluctuations in the crypto exchange.
Data collected by Deribit shows that the ratio of put and call options for the expiring Bitcoin contracts is 0.61, indicating a preponderance of long contracts (calls) over short ones (puts). Conversely, the put/call ratio for Ether options stood at 0.46. The put/call ratio, an analytical tool that gauges market sentiment, signifies bullish sentiment when the rate is lower than 0.7, and bearish sentiment when the rate exceeds 1.
In the case of Bitcoin, the traders stand to incur the most losses when the price hits $66,000, the so-called maximum pain point. As for Ether, this point is at $3,300. Bitcoin presently trades at $68,210, $2,000 above its pain point, while Ether trades at $3,738, exceeding its pain point by over $400.
The leading meme coin affiliated with former U.S. President Donald Trump has managed to recover after experiencing a 16% nosedive upon his conviction on 34 felony counts related to business record deception. As a result of the case, which pertained to a hidden payment to adult film star Stormy Daniels, Trump now heads to sentencing and described the trial outcome as a "disgrace".
The TRUMP token fell 16% but swiftly bounced back to a 24-hour peak. After the verdict, the market cap of the Donald Trump-affiliated MAGA (TRUMP) token dropped more than $130 million within 20 minutes but has since recovered and is now only 1.5% off its 24-hours high.
Do Kwon and Terraform Labs have accepted to settle their fraud case with the SEC, several months after being held accountable for investor fraud. As revealed in court filings, the legal representatives of both entities anticipate presenting a settlement for court approval by June 12, 2024.
The SEC's case against Kwon and Terraform involved claims of misleading investors during the marketing and selling of crypto tokens, including the ill-fated algorithmic stablecoin TerraUSD. It was alleged that the tokens were sold without the correct registration. Penalties could be hefty for Kwon and Terraform as the SEC has asked for about $5.3 billion in damages, although Terraform has proposed a vastly reduced figure of $1 million.
Kwon, who was detained in Montenegro in March 2023, could also face further charges. Reporters Geraint Price, Sam Bourgi, and Felix Ng contributed to this story.
Published At
5/31/2024 3:38:21 PM
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