Buy and put options on ETH worth 1 billion euros will expire on Friday. The price could crash.
Friday, June 25th , marks the deadline on which huge amounts of the Ethereum currency ETH could change hands. Because on this day, options to buy and sell ETH, currently valued at over 1 billion euros, expire. In a comparable major event on March 16, the expiry of the options in the days before had pushed the price down considerably, only to shoot up by 60 percent in the three weeks after that.
$ 2200 as the limit for Ethereum
With options, the point is that you agree a price for the asset – in this case Ethereum – at which you can buy (call option) or sell (put option) at a later date, regardless of what the actual price is now . To keep the price guaranteed, you have to pay a fee. And the whole thing has an expiration date. On June 25th, investors have to decide whether to redeem their buy or sell option or let it expire.
The vast majority are call options. It is assumed that the price has risen in the meantime. Until or on the key date, you then buy cheaper than the asset is actually worth. With Ethereum, most of these options have been pegged at over $ 2,200 . Many of the put options that have been speculating on falling prices are priced below $ 2,100 . This price region is therefore considered to be indicative of whether ETH will decrease or increase through the reference date.
Ethereum weakens after Bitcoin crash
Since the price of Ethereum is currently even below 2000 dollars, this could now trigger further option sales and continue to depress the price. Such deadlines do not always actually lead to a crash or a price explosion. Currently, ETH's price curve looks like a copy of Bitcoin. If the price of the largest cryptocurrency rose in the past few days, so did the price of Ethereum and vice versa.
Therefore, it is also possible that the link to Bitcoin is stronger than the expiry of the options – at least in terms of price. It is also possible that the downward movement of the past few days has already anticipated part of the price action around the fateful day. No matter how it all ends, the ETH community can at least check off the question mark around June 25th soon.
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