{"id":46364,"date":"2021-07-20T10:36:17","date_gmt":"2021-07-20T07:36:17","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=46364"},"modified":"2025-09-01T16:01:48","modified_gmt":"2025-09-01T13:01:48","slug":"market-makers-hedge-against-bitcoin-dropping-below-20000","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/market-makers-hedge-against-bitcoin-dropping-below-20000\/","title":{"rendered":"Market makers hedge against bitcoin dropping below $20,000"},"content":{"rendered":"<p>On July 18, the Deribit cryptocurrency derivatives exchange saw two trades of 500 bitcoin put options expiring on December 31, with strikes at $20,000 and $22,000.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">\ud83d\udca5Monster prints from early this morning on Paradigm<\/p>\n<p>31Dec 22k Puts trading 500x (500 BTC)<br \/>31Dec 20k Puts trading 500x (500 BTC)<\/p>\n<p>cleared on <a href=\"https:\/\/twitter.com\/DeribitExchange?ref_src=twsrc%5Etfw\">@DeribitExchange<\/a> <\/p>\n<p>Impossible to get liquidity on demand for this kind of size directly on the order-book! <a href=\"https:\/\/t.co\/vgMEWO78Jq\">pic.twitter.com\/vgMEWO78Jq<\/a><\/p>\n<p>\u2014 Paradigm (@tradeparadigm) <a href=\"https:\/\/twitter.com\/tradeparadigm\/status\/1416820117409763332?ref_src=twsrc%5Etfw\">July 18, 2021<\/a><\/p><\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>The trades were executed via Paradigm&#8217;s over\u2011the\u2011counter platform for institutional investors.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u201cIt is impossible to obtain liquidity on demand for such an amount directly in the order book!\u201d<\/em>, the message said.<\/p>\n<\/blockquote>\n<p>QCP Capital CEO Darius Sit, in an interview with <a href=\"https:\/\/www.coindesk.com\/bitcoin-drops-as-investors-buy-22k-and-20k-puts\">CoinDesk<\/a>, said there was also considerable interest in selling September puts.<\/p>\n<p>The piece suggests that large investors were likely buyers of the contracts. Through such actions they hedged long positions on the spot or futures markets.<\/p>\n<p>A put option gives the holder the right to sell the underlying asset at a fixed price. The price may be above the market price at expiration, which is advantageous to the trader.<\/p>\n<p>The holder takes a bearish position, but may also use it as insurance to offset losses if their primary bet on the spot\/futures market does not pay off.<\/p>\n<p>According to<a href=\"https:\/\/analytics.skew.com\/dashboard\/bitcoin-options\"> skew<\/a>, in the long run bullish sentiment dominates the options market. The put\/call ratio for six-month contracts remains negative.<\/p>\n<p>However, over horizons of one week, one month and three months, the opposite trend is observed. This points to dominance of bearish bets.<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"903\" height=\"542\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/1-500.png\" alt=\"Market makers hedge against bitcoin falling below $20,000\" class=\"wp-image-142969\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/1-500.png 903w, https:\/\/u1f987.com\/wp-content\/uploads\/1-500-300x180.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/1-500-768x461.png 768w\" sizes=\"auto, (max-width: 903px) 100vw, 903px\" \/><figcaption>The put\/call ratio for options with different maturities. Data: skew.<\/figcaption><\/figure>\n<p>As noted, on July 20 the price of bitcoin fell <a href=\"https:\/\/u1f987.com\/en\/news\/bitcoin-price-falls-below-30000\">below $30,000<\/a>.<\/p>\n<p>Earlier, the &#8220;Bond King&#8221; Jeffrey Gundlach called the chart of the first cryptocurrency scary and <a href=\"https:\/\/u1f987.com\/en\/news\/bond-king-jeffrey-gundlach-sees-risk-of-bitcoin-dropping-to-23000\">predicted a drop to $23,000<\/a>.<\/p>\n<p>Prior to that, JPMorgan analysts did not rule out a fall to <a href=\"https:\/\/u1f987.com\/en\/news\/jpmorgan-analysts-do-not-rule-out-bitcoin-dropping-to-25000\">$25,000<\/a>.<\/p>\n<p> Subscribe to ForkLog news on <a href=\"https:\/\/vk.com\/forklogcom\" target=\"_blank\" rel=\"nofollow noopener\">VK<\/a>! <\/p>\n","protected":false},"excerpt":{"rendered":"<p>On July 18, the Deribit cryptocurrency derivatives exchange saw two trades of 500 bitcoin put options expiring on December 31, with strikes at $20,000 and $22,000.<\/p>\n","protected":false},"author":1,"featured_media":46365,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[18,480,1168,1267],"class_list":["post-46364","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-bitcoin","tag-bitcoin-price","tag-crypto-derivatives","tag-cryptocurrency-trading"],"aioseo_notices":[],"amp_enabled":true,"views":"13","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/46364","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=46364"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/46364\/revisions"}],"predecessor-version":[{"id":46366,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/46364\/revisions\/46366"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/46365"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=46364"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=46364"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=46364"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}