XRP Options To Debut On Deribit: A Game-Changer For Price
October 09 2023 - 8:00AM
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The rapidly evolving crypto market is set to witness yet another
milestone as Deribit, the world’s preeminent crypto options
exchange, prepares to launch options contracts for XRP, Solana
(SOL), and Polygon (MATIC). Given the dominating position of
Deribit in the options sphere, this inclusion could have noteworthy
ramifications on the pricing dynamics of XRP. Deribit To Debut XRP
Options Deribit, having established itself as the leading crypto
options exchange both in terms of trading volume and open interest,
is not letting the recent dip in digital-asset volatility deter its
expansion endeavors. As reported by Bloomberg, the exchange is
poised to roll out options contracts for the XRP token in January.
This move, announced by Chief Commercial Officer Luuk Strijers,
will augment the platform’s offering which until now has been
focused mainly on Bitcoin, Ether, and USD Coin options. The choice
might be influenced by financial interests and prevailing market
conditions. Trading volumes for crypto derivatives declined to
roughly $1.5 trillion in September, down from about $2 trillion
earlier in the year, affected by reduced prices and volatility
relative to the highs of 2021. Related Reading: When Are AMMs
Coming To XRP Ledger? Ripple CTO Gives Clear Answer Further
solidifying its strategic vision, Deribit is not just limiting
itself to options expansion. The Panama-based giant has disclosed
plans to transition its operations to Dubai, a more
crypto-receptive jurisdiction, following the attainment of
necessary licensing. Parallel to this, the firm intends to bolster
its workforce by approximately a dozen, adding to its current
roster of 115. Strijers expressed the inherent challenges in timing
new product launches given the current market sentiment. “Is this
the best environment to launch new products or should we defer?” he
reflected, but remained optimistic about potential volatility
upticks post the January launch. Impact On The Price With an
overwhelming 85% market share in options trading, the influence of
Deribit is unmistakable. The rest of the market is shared by
competitors like OKX, Binance, and Bybit. A considerable 85% of the
volume flowing through Deribit originates from institutional
clientele. Therefore, the addition of XRP options on such a
dominant platform is inevitably going to steer substantial
attention toward XRP’s pricing dynamics. Options, by design,
provide traders the privilege (without an obligation) to buy or
sell the underlying asset at a preset price until a specific date.
This can have multifaceted implications for the underlying asset.
XRP, as it gets intertwined with the options mechanism, might
witness higher short-term volatility in its pricing, particularly
around the expiry of these contracts. Related Reading: XRP Price On
The Cusp Of Major Uptick To $1.4: Crypto Analyst “Quarterly
expiries are typically the most significant, in terms of volume and
value,” highlighted Strijers in a recent discourse. Drawing
parallels with Bitcoin, it’s plausible that XRP might undergo
amplified volatility as these options contracts approach their
expiration, especially at quarter-end, depending on the volume of
XRP options being traded. Conclusively, with Deribit’s unassailable
stature in the options space and the inherent nature of options
contracts, the induction of XRP options might very well become a
pivotal point in XRP’s pricing journey. Traders, especially those
engaged in XRP, will need to brace themselves for the nuanced
challenges and opportunities this integration brings forth. At
press time, XRP was trading at $0.4994 after briefly falling to
$0.4880. Featured image from Shutterstock, chart from
TradingView.com
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