Key takeaways:

97% of the $8.3 billion in Bitcoin put options expire worthless at a $102,000 BTC price.

Short covering above $105,000 could trigger a Bitcoin price rally to new highs.

Bitcoin (BTC) soared above $101,000 on May 8, reaching its highest level in over three months. The 4.6% daily BTC price gain triggered $205 million in liquidations of bearish futures positions and eroded the value of nearly every put (sell) option. Traders now question whether Bitcoin is poised to break its $109,354 all-time high in the near term.

Bitcoin put (sell) options open interest for May-June-July, USD notional. Source: Laevitas.ch

The aggregate Bitcoin put (sell) option open interest for the next three months stands at $8.3 billion, but 97% of those have been placed below $101,000 and will likely expire worthless. Still, this does not mean every put options trader was betting on Bitcoin’s downside, as some may have sold those instruments and profited from the price gains.

Top BTC option strategies at Deribit past two weeks. Source: Laevitas.ch

Among the largest option strategies traded at Deribit is the “bull put spread,” which involves selling a put option while simultaneously buying another put at a lower strike price, capping both maximum profit and downside risk. For example, a trader aiming to profit from higher prices might sell the $100,000 put and buy the $95,000 put.

Bull put spread profit/loss. Source: Strike-Money

Cryptocurrency traders are known for their exaggerated optimism, and this is reflected in the leading strategies on Deribit’s options markets, such as the “bull call spread” and the “bull diagonal spread.” In both cases, traders anticipate Bitcoin prices at expiry to be equal to or higher than the options traded.

$100,000 Bitcoin boosts bullish options, but shorts may resist

If Bitcoin sustains the $100,000 level, most bullish strategies will yield positive results in the May and June options expiries, giving traders additional incentives to support upward momentum. However, there is the possibility that sellers (shorts) using futures markets will exert their influence to prevent a new Bitcoin all-time high.

Related: Coinbase to acquire options trading platform Deribit for $2.9B

The aggregate open interest on Bitcoin futures currently stands at $69 billion, indicating substantial demand for short (sell) positions. At the same time, higher prices might force bears to close their positions. However, this “short covering” effect is significantly muted in fully hedged positions, meaning those traders are not particularly sensitive to Bitcoin price movements.

For instance, one could buy spot Bitcoin positions using margin or spot exchange-traded funds (ETFs) while simultaneously selling the equivalent in BTC futures. Known as the “carry trade,” this strategy is delta neutral, so the profit comes regardless of price swings, as the monthly Bitcoin futures trade at a premium to compensate for the longer settlement period.

Bitcoin 2-month futures annualized premium. Source: laevitas.ch

The Bitcoin futures premium has been below 8% for the past three months, so the incentives for the “carry trade” have been limited. Hence, it is likely that some form of “short covering” will occur if Bitcoin surges above $105,000, which greatly improves the odds of a new all-time high over the next couple of months.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Coinbase’s agreement to buy Deribit highlights the increasing importance of financial derivatives for cryptocurrency exchanges, according to industry executives. 

On May 8, Coinbase, the US’s largest crypto exchange by trading volume, agreed to acquire crypto derivatives platform Deribit for $2.9 billion in the crypto industry’s largest corporate acquisition to date.  

The deal reflects increasing competition among digital asset exchanges and brokerages — including Coinbase, Kraken and Robinhood — to dominate the burgeoning crypto derivatives market. 

“Global derivatives trading is a key driver of growth for Coinbase,” Spencer Yang, co-founder of Fractal Bitcoin, a Bitcoin scaling solution, told Cointelegraph.

Coinbase agreed to buy Deribit on May 8. Source: Coinbase

The merger established Coinbase as the world’s largest crypto derivatives platform by open interest, the exchange said in a blog post announcing the deal. 

In a May 8 X post, Jeff Park, Bitwise’s head of alpha strategies, said Coinbase’s Deribit acquisition “might be the best ‘value’ deal in crypto I’ve ever seen,” adding the the deal is “a coup for Coinbase.”

In March, US crypto exchange Kraken agreed to buy NinjaTrader, a futures brokerage, for $1.5 billion.

Coinbase’s international derivatives exchange saw some $10 billion in trading volume on May 8. Source: Coinbase

Related: Coinbase to acquire options trading platform Deribit for $2.9B

Expanding global footprint

Coinbase already has a global presence in perpetual futures, with roughly $10 billion in daily trading volume as of May 8. It also has a US-based derivatives trading platform listing more than 20 futures contracts. 

Deribit is the largest crypto options exchange, with about $30 trillion in open interest, according to the blog post. 

With this acquisition, Coinbase “has captured all possible regulated and self-regulated derivatives products,” Yang added.

It also bolstered Coinbase’s presence in the global market, which is still dominated by Binance, the world’s largest crypto exchange by volume. Deribit does not serve US-based traders, according to its website. 

“Deribit is the platform of choice for global traders for Bitcoin and Ethereum options,” Yang said.

Futures contracts are standardized agreements to buy or sell an underlying asset at a future date, often using leverage in a bid to enhance returns.

Options are contracts granting the right to buy or sell — “call” or “put,” in trader parlance — an underlying asset at a certain price.

Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

Wellgistics Health, a healthcare infrastructure company, will integrate XRP (XRP) and related technologies into its payment network to streamline transactions between pharmacies, medical suppliers and prescription medication manufacturers, the company said in an announcement on May 8.

Wellgistics cited the finality time of XRP transactions and reduced transaction costs, which are fractions of a penny, compared to legacy financial architecture like automated clearinghouse (ACH) payments or wire transfers, as reasons for using XRP. Brian Norton, CEO of Wellgistics Health, said in the announcement:

“I believe that the future winners in healthcare will not be the companies with the biggest buildings, they will be those with the fastest rails, cleanest data, and most efficient platforms. We are betting on infrastructure — not inertia.”

The integration of XRP will reduce cross-border friction and allow transactions between different businesses in the supply chain to settle instantly, in real time, the announcement reads.

Blockchain payment rails and cryptocurrencies can significantly reduce international transaction costs, giving rise to business opportunities that were previously out of reach or too expensive to implement and opening up global trade for residents in developing economies.

Related: Can XRP price reach $4 in May? Analysts are watching these key levels

Legacy banking system pushes back against crypto innovation

Cryptocurrencies like Bitcoin (BTC) disintermediate banks and financial institutions by providing peer-to-peer transactions over a trustless network of decentralized nodes that are censorship-resistant and give the holder self-sovereignty over their money.

Other cryptocurrencies like stablecoins and altcoins still feature a third-party issuer, but have the benefit of trading on blockchain payment rails, through the internet, without markets closing.

Banks and legacy financial institutions pushed back against the GENIUS stablecoin bill in March 2025, arguing that stablecoins would erode the banking industry’s market share of financial services and eventually drive out banks altogether.

US Senator Elizabeth Warren also fought to include several provisions in the bill that would force any stablecoin firm that wants to do business in the United States to issue their stablecoin with the oversight of an established financial institution.

The bill, hailed as a bipartisan success, failed to advance to a floor vote on May 8 after pushback from Democratic senators.

Magazine: ZK-proofs are bringing smart contracts to Bitcoin — BitcoinOS and Starknet