Odaily: After Binance suffered a theft of over $6 billion in crypto assets, demand for safe-haven hedges in the Bitcoin market rose markedly, with institutional investors buying put options to hedge against short-term downside risk. Data from Paradigm, an institutional liquidity network for crypto derivatives, shows that within 8 hours after the hack, the notional value of Bitcoin options block trades reached about $590 million, roughly half of Deribit's Bitcoin options block trading volume over the same period, with trading direction clearly skewed bearish.
Nicolas Quatravaux, Paradigm's head of EMEA, said the first large trade occurred at 20:38 UTC, about 15 minutes after the first outflows appeared from Binance wallets and before the incident was publicly disclosed. The trade involved buying 250 Bitcoin put options expiring October 31 with a strike price of $78,000, with a notional value of about $20 million; three minutes later, another 250 of the same options traded, with buyers paying about 35% more.
After that, two more block trades each involving 1,000 BTC in mid-November-expiry put options with a strike price of $74,000 appeared, with a combined notional value of about $155 million. Overall, flows were concentrated in put options with strike prices of $74,000 to $78,000, close to the current spot price, indicating investors preferred to hedge against further short-term pullbacks rather than bet on an extreme crash. Deribit also saw an increase in put option trading, including a multi-leg put strategy spanning November and December expiries with a notional value of about $190 million. However, the market is not entirely bearish, with some traders still positioning for call options. (CoinDesk)
