After the devastating crash in May, August 2021 marked the first month of real recovery for Bitcoin and Ethereum as both assets regained important levels of resistance. In the past few weeks, Bitcoin initially managed to take a position above USD 42,000 and has now consolidated above the USD 50,000 mark. Ethereum previously retested $ 4000 and was only about $ 400 away from its ATH.

Market optimism has brought back futures premiums in the industry as both BTC and ETH recorded strong derivatives volumes. However, despite a drawdown, ETH options continued to see higher exposure last month.

Bitcoin, Ethereum Options, and the DVOL Break?

Before looking at the option dates, a look at the Deribit Implied Volatility Index, or DVOL, indicated that it is currently around 90 for BTC and 110 for ETH. In addition, the volatility structure at the money was also less than 70%, which means that cautious price movements are currently expected.

As both Bitcoin and Ethereum move cautiously up and sideways in the market, expectations have also adjusted to its development.

Source: Deribit

According to the data, total sales in August were around $ 60 billion, up about 48% from July 2021. Average daily nominal sales were $ 1.9 billion. As of May 2021, it will still be below its peak.

Source: Deribit

In terms of options turnover, 382,406 BTC and 1,400,732 ETH options contracts were traded in August 2021, up 29% and 21% respectively since July 2021.

Well, as observed, regardless of the larger trend, Ethereum Options has consistently seen more exposure than Bitcoin Options since January 2021, and data suggests that NFTs played a major role in that.

The NFTs and Institutions brew for ETH

For the larger market, NFTs have been a source of interest for the past few weeks, but for the derivatives market, it has been a green signal for institutional traders to demonstrate this bullish behavior. In August Deribit increased its options market share to 94.7% of total OI in Ethereum options.

In addition, 536,000 ETH options contracts were traded via block trades, which resulted in a nominal turnover share of 22% of the total ETH options contracts traded on Deribit. Call options and only 14% put options accounted for 86% of the total ETH block turnover.

Therefore, without being part of the futures market, NFTs also had an impact on futures traders, as the mood in the derivatives network continued.


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