In brief

  • Crypto markets took a sharp downturn overnight with Bitcoin losing nearly 4%.
  • More than $800 million worth of futures options are due to expire on October 30.
  • Wall Street has its roughest day since June.

Halloween 2020 is a scary time for Bitcoin. Is the ghost of Satoshi returning? Not quite. It’s the ghost of futures past, aka, a ton of Bitcoin options contracts

There is roughly $750 million worth of bitcoin options contracts-essentially bets on what the price of Bitcoin will be at a future date-due to expire on October 30. 

 

That’s according to data and analytics firm Skew. If that wasn’t enough, there’s $76 million worth of ETH options due to expire at the same time. 

What does that mean? When the contracts expire, if the bettors had been right, they get a nice pay day, if they’re wrong, they lose their stake. Many market watchers interpret these events as moments of increased volatility.

We’ve had big expiry dates like this before, most notably in September, when $1 billion in bets were due to be closed, but it did little to move Bitcoin’s inexorable rise.  

Today however, something appears to have spooked the world’s biggest cryptocurrency by market cap. Bitcoin took a big hit dropping 3.53%, taking the global market cap down with it. 

Almost all currencies followed with Ethereum down 2.56%, and XRP 2.49%. The biggest losers were Monero, down 5.12%, Polkadot down 4.94% and Litecoin 4.33%. 

Crypto.com’s beleaguered CRO token continues to take a beating, losing 6.89% to round off another week of double digit losses.  

“The combination of the US elections, the worsening state of some of the world’s biggest economies, and COVID’s continued presence are playing their part in putting pressure on assets,” says a spokesperson from AAX, the world’s first digital asset exchange powered by the London Stock Exchange.

Peering at the Fear & Greed Index, sentiment among investors of Bitcoin is still in the “greed” section, although it’s been slipping south all week. 

The rout of Wall Street 

Things aren't much better on Wall Street. Wednesday saw a rout in the markets as the Dow had its biggest single session drop since June, losing 943 points, or 3.4%. 

Over on the Nasdaq, things were no better as tech giants Google, Twitter and Facebook all faced a grilling by US senators over the companies’ content moderation policies. 

While the markets have recovered somewhat in late trading, volatility is at its highest in months. According to the CBOE Volatility Index, markets haven’t been this bumpy since early summer. 

The combination of fresh lockdowns in France and Germany, the record-breaking level of news cases in the US, and the end of furlough protection in places like the UK is all pointing to a bleak outlook for the winter as a COVID vaccine is still months away from being ready. 

Let’s just be grateful we’ve all got an extra hour in bed eh?

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