Bitcoin Stock ( BTC:USD )
Bitcoin stock ( BTC:USD )–0.76% has become boring , an uncharacteristic shift for an asset that was once a byword for volatility. At least, that is how it seems, with prices for the largest cryptocurrency mostly flitting between $19,000 and $20,000 since early September.
Analysts are divided on what happens next. The relative calm can be viewed as either bullish or bearish.
Either the current stability represents the bottom of a brutal bear market, or it is a chance for traders to reposition before the next eye-watering move. Bitcoin’s correlation with stocks, which has emerged as high inflation and rising interest rates slam markets, is likely to play a role no matter what.
Why has Bitcoin stock stopped moving significantly? Crypto traders have grown accustomed to daily percentage swings in the double digits, but while last month marked the worst September for the S&P 500SPX +1.17% since 2002, digital assets barely budged.
The answer may lie in crypto derivatives, according to one analyst. A vast market for derivatives like futures, options, and swaps on Bitcoin and other tokens is intertwined with that for digital assets themselves. Derivatives represent about two-thirds of all crypto trading volumes.
“Bitcoin’s solid movement around $19,000 and its failures to maintain the level above $20,000 for the past couple of weeks is probably something to do with its option market,” said Yuya Hasegawa, an analyst at crypto exchange Bitbank.
The Bitcoin options market allows traders to buy contracts that represent the right to buy or sell Bitcoin at a future price—either a bullish “call” option or a bearish “put.” An option can be exercised if the underlying asset, in this case Bitcoin, hits a certain price called the “strike” within an agreed-upon perio...
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