Cryptocurrency options exchange Deribit is set to introduce altcoin options contracts for Solana (SOL), Ripple (XRP), and Polygon (MATIC) in January, amidst a significant crypto market downturn. The move comes as Bitcoin (BTC) and Ethereum (ETH) are experiencing record low volatility, making these new derivatives potentially more effective as hedges. The decision to delay the launch until January is attributed to the ongoing low volatility in the market.
Luuk Strijers, the CCO of Deribit, expects that the new altcoin options contracts will boost market volatility. Richard Galvin of Digital Asset Capital Management highlighted Ethereum’s dwindling popularity due to its low volatility, while pointing out that altcoins such as SOL, XRP, and MATIC are prone to price swings from smaller trades due to their lower liquidity. However, it is still uncertain whether Deribit will implement measures to counteract potential market manipulation risks associated with its options contracts.
In preparation for the launch of these options contracts, Deribit is planning a transition from Panama to Dubai. This decision follows substantial losses incurred due to Three Arrows Capital’s failure to meet margin requirements.
Meanwhile, ETH futures ETFs have struggled to attract institutional investors. Vetle Lund of K33 Research reported that ETH futures represented a mere 0.2% of Bitcoin futures ETFs volumes in 2021.
On Monday, geopolitical tensions, particularly the Israel/Palestine conflict, exerted downward pressure on crypto prices. Bitcoin has fallen over 1% to the mid-$27,000s, while Ether has dropped over 3% to $1,580 following the Ethereum Foundation’s $2.7 million ETH sale on Uniswap. There are concerns about ETH potentially falling below the $1,550 support level and BTC breaching the $28,000 threshold amid its uptrend.
As traders navigate this volatility, they are increasingly turning to illiquid shitcoin/meme coin markets. Tokens such as Versus ($VS), Only Possible On Ethereum ($OPOE), and Qlindo Realestate ($QLINDO) have demonstrated growth according to DEXTools’ security audit but carry inherent risks. Crypto presales, offering tokens of emerging crypto projects at discounted prices, present an alternative high-risk-high-reward investment strategy that has historically yielded substantial returns.
