Oil prices have fallen after Iran signalled it could reopen the Strait of Hormuz within seven days if the United States eases military pressure and lifts its port blockade, according to multiple reports citing a senior Iranian official.
West Texas Intermediate crude was down more than 2.5% at $89 a barrel, leaving it roughly 15% below its September high. Brent crude also fell below $98 a barrel.
A sustained reduction in tensions in the Middle East could support risk assets. Lower energy prices would ease inflationary pressure and reduce concerns about further interest rate rises.
Bitcoin, meanwhile, was consolidating around $86,000 after a sharp rally on Monday took it to an intraday high of $87,300. Gold was little changed over the previous 24 hours, trading at approximately $4,336 an ounce.
Bitcoin options expiry
Around $14bn (£10.4bn) of bitcoin options are due to expire on Deribit on Friday, making it the largest single expiry date of the year.
But Mauricio Di Bartolomeo, co-founder of lender Ledn, which has originated more than $10bn in bitcoin-backed loans since 2018, believes the most significant market impact has already taken place.
“Quarterly expirations like September’s are a two-act event,” he said.
The first stage came last week, when options linked to BlackRock’s IBIT fund expired in what Di Bartolomeo described as the largest expiry of its kind on record for the exchange-traded fund.
The position was heavily weighted towards call options, which pay out when the price moves above a predetermined level. The maximum-pain level – the point at which the greatest number of contracts expire worthless – was close to $40 a share.
Bitcoin’s move above $80,000 pushed a substantial number of those calls beyond their strike prices. Dealers who had sold the options faced losses as the price increased and responded by buying the underlying asset.
In the case of IBIT, that meant purchasing shares in the fund. Because new shares in a spot bitcoin ETF require bitcoin to be bought, the resulting hedging activity also fed through to the cryptocurrency itself.
Di Bartolomeo said Friday’s Deribit contracts carry forward that structure. He identified large concentrations of call options at $85,000 and $100,000 as levels where the same process could occur again. Bitcoin was already trading above the first of those thresholds.
Stablecoins in APAC
As stablecoins become part of regulated financial systems, the APAC region is emerging as an important testing ground. A report examines the region’s regulatory rules and use cases, as well as the role of RLUSD.
