Cryptocurrency has seen an unprecedented boom this year due to heightened geopolitical tensions and banking uncertainty. Bitcoin, the world's leading cryptocurrency by market cap, has exploded to all-time-highs bolstered by its close correlation with equities, increasing demand for safe haven assets, and low market liquidity. The total number of outstanding bitcoin options contracts on the CME hit $1.3 billion this month, rising 67% since the start of 2021 and setting a new all-time high, while the total volume of bitcoin options also peaked this month at $1.67 billion.

Investors have been attracted to the cryptocurrency since it maintains a low correlation to other assets and can act as a hedge amid warming relations between the U.S. and China and a global banking crisis. As investors position for further appreciation of the cryptocurrency and seek to protect their portfolios from sharp sell-offs, bitcoin options trading has become increasingly popular, with traders buying puts to guard against any market downturns.

Bitcoin has soared an impressive 70% since the start of the year and, as it continues to trade around $28,000 and struggles to break past this critical resistance, the cryptocurrency is on track for its best quarter since the start of 2021. Without any major negative movements today, bitcoin could be set to experience its sixth consecutive month of price growth – something it hasn’t achieved since 2013.

Analysts suggest that low liquidity in the cryptocurrency market is driving most of bitcoin's price gains, with liquidity dropping to 10-month lows and causing prices to have less support on the downside and the upside. Despite this, crypto derivatives traders remain optimistic, with the chief commercial officer at Deribit noting that the risk was ‘back on’ in a big way following the collapse of Silicon Valley Bank.



The rise of bitcoin has been nothing short of spectacular this year as it gains popularity as a safe haven asset and, with low market liquidity driving prices higher, the leading cryptocurrency continues to draw increased interest from institutional investors who are looking to hedge against the banking crisis and take advantage of the low correlation with other assets. Bitcoin options volume and open interest on CME have both hit all-time highs this month and, as traders buy puts to guard against market downturns and optimists position for further upside, the cryptocurrency is set to experience its best quarter since the beginning of 2021.



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