Sonic Labs has launched a new points program to drive DeFi growth and reward users. 

The S&P 500 gained 0.11%, led by utilities, financials, and materials, as lighter inflation eased yields. Focus shifts to December's inflation report and financial earnings. Coindesk Indices, an index measuring broader cryptocurrency market performance was up by 3.03%, with Bitcoin and Ether rising by 3.14%  and 3.24%, respectively in the past 24 hours.

Today's top performer is A8, which surged 29.7% following the launch of Ancient8 SuperApp V3, an all-in-one platform for simplified Web3 management.

Ancient8 (A8), founded in 2021, is a gaming-focused Ethereum Layer 2 network using Optimism and Celestia to enable fast, affordable EVM game development with community-driven developer support. 

, a streamlined platform for managing Web3 activities. It combines staking, token swapping, liquidity management, an NFT marketplace, cross-chain asset bridging, and game discovery into a single user-friendly interface. The app simplifies processes, enhances security, and helps users maximize the potential of their digital assets, catering to both newcomers and experienced users.

Check Out the Latest Prices, Charts, and Data of 

 a new points program to drive DeFi growth and reward users. The program includes three types of points: Passive Points for holding whitelisted assets, Activity Points for deploying assets as liquidity on apps, and App Points (Sonic Gems) for developers to distribute as rewards via their apps. The initiative also features an airdrop of 200 million S tokens and incorporates Rings, a yield-bearing stablecoin protocol that provides liquidity to DeFi apps. Sonic's points program offers a dynamic way for users and developers to enhance their DeFi experience while contributing to the growth of the platform.

Yesterday, the BTC Spot ETF data showed a total flow of $9.7 million, with $0.0 million from GBTC and $9.7 million from non-GBTC sources.

, offering participants a chance to receive tokens as part of the platform's decentralization journey. The airdrop rewards key contributors, including early adopters, active community members, and global partners. Registration is open until January 18, 2025, and participants can claim tokens before the Token Generation Event (TGE) in Q1 2025. Plume's mission is to build a unified onchain economy that connects real-world assets with crypto, and the airdrop is the first step toward that vision. More details and eligibility information can be found on their official website.

Beginner

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Sonic Labs Launches Innovative Points Program to Drive DeFi Growth and Reward Users

GAME by Virtuals (GAME) is a leading AI agent development framework enabling quick creation and deployment of autonomous agents for web3, gaming, and social media.

Few people will argue with the notion that 

 (AI) is the fastest-growing sector in the world of business. This also applies to the 

 industry. Within the broader AI field, however, there's one area that particularly stands out with its growth rates — the niche of 

. Self-contained, autonomous AI workers are growing increasingly popular on blockchains, with leading AI agent cryptocurrencies posting head-spinning price increases.

 (VIRTUAL) and several tokens related to the platform, including GAME by Virtuals (GAME). Leveraging the underlying Virtuals Protocol, GAME is a development framework that lets developers quickly build and deploy autonomous AI agents suitable for various transactional environments. The GAME framework allows AI agents to make complex decisions based on the information supplied, lifting the overall sophistication of such agents to an entirely new level.

Launched in October 2024, the GAME token has appreciated over 3,000% as of January 2025, entering the list of the top 10 AI agent cryptocurrencies by market cap.

 (GAME) is an AI agent development framework powered by the Virtuals Protocol. 

It lets developers quickly build modular, autonomous AI agents and deploy them to various environments, such as gaming, entertainment and social media platforms.

At the core level, GAME is supported by the Virtuals Protocol, a decentralized platform on the 

 Layer 2 chain that’s designed to power tokenized, co-owned AI agents with revenue-generating capabilities. Virtuals Protocol provides an environment for tokenizing and using AI agents for various use cases.

GAME by Virtuals supports low-code, efficient creation and management of AI agents that can easily be plugged into various web3 platforms and even interact in real time with other agents. By default, AI agents developed using the GAME framework are deployed as X (formerly Twitter) agents. In this capacity, they can serve varied purposes for crypto users and 

 (DApp) operators. This could include community building, market monitoring, news and trading signal aggregation, data collection and even API-based integration with external trading platforms.

Thanks to the framework's modular design, a GAME-based agent can include different functions that are easily plugged into and out of it. Additionally, GAME allows developers to create non–X AI agents from scratch to integrate into other environments, such as blockchain games, messaging networks like Telegram and other types of applications. In essence, the programming tool kit provided by GAME allows developers to specify sophisticated agent characteristics and autonomous behavior. For example, GAME-based autonomous agents might operate in gaming, virtual reality (VR) and virtual world applications, providing immersive experiences and carrying out complex tasks.

The development of X-based agents via GAME is a simplified process. Developers can utilize an Agent Sandbox, a test environment provided by the Virtuals Protocol, to specify the key characteristics of their AI agent on X. This is a streamlined way to quickly and efficiently launch a basic social media agent without having to create an agent token. 

After deploying the agent to X, developers can easily add or remove its functionalities to adapt the agent to their specific use cases.

For applications beyond X, developers can build an agent from scratch using the GAME framework's programming functions. In the project's terminology, this is called GAME-as-a-Service. Within this mode, the agent's decision-making rules and characteristics are specified via API calls. For those familiar with AI-based programming, GAME-as-a-Service provides a more powerful and flexible way to build AI agents, with high levels of functional sophistication, as compared to the Agent Sandbox.

To build and launch an AI agent, developers must specify three categories of attributes that define their agent’s behavior and autonomous decision-making: Agent Definition Prompts, High Level Planner (HLP) Context and Low Level Planner (HLP) Context.

— These include the agent’s goal, character card and world information. In essence, this trio of attributes determines the agent’s overall behavior, memory traits, personality, background, tweeting style and the specifics of its virtual environment.

— This high-level tool establishes the input information to provide a dynamic context for the agent's decisions.

— This is a set of instructions for the agent’s expected outputs to execute various actions and functions within its environment.

To build and deploy agents via GAME-as-a-Service, you’re expected to be familiar with technologies like JavaScript and JSON. The Virtuals platform also provides an agent-building software development kit (SDK) in Python.

The GAME by Virtuals framework’s associated crypto token is also known as GAME. As of early January 2025, the project has provided scant information regarding the token’s utility beyond its basic supply specifications. In general, AI agents launched via Virtuals Protocol are monetized using project-specific tokens. Thus, it’s expected that agents built via the GAME framework are monetized using the GAME token, and that the GAME token might also support additional use cases in the future.

For each token on the Virtuals Protocol, including GAME, there’s a corresponding liquidity pool in which each token is paired with VIRTUAL, the protocol’s native cryptocurrency. This facilitates monetization and trading opportunities for AI agents built using the framework.

The GAME token was launched on Oct 26, 2024 and features a maximum, total and circulating supply of 1 billion. Similar to VIRTUAL and other platform-specific tokens on the Virtuals Protocol, GAME has been issued on the Base blockchain.

You can buy the GAME token on Bybit’s Spot market as a trading pair (

Additionally, through Jan 23, 2025, 9AM UTC, you can take advantage of Bybit's campaign dedicated to the GAME token to grab a share of the 

. New users who complete basic identity verification can earn GAME rewards by accumulating a deposit volume of at least 500 GAME, or depositing at least 100 USDT and trading 100 USDT worth of GAME via their first trade using their Bybit account. Existing users can also qualify for rewards by trading at least 500 USDT worth of GAME on Bybit’s Spot market. The more you trade, the larger your share of the prize pool. 

As of Jan 15, 2025, the GAME token is trading at $0.1922, which is 51% lower than its ATH of $0.3918 on Jan 2, 2025, and 7,190% higher than its ATL of $0.002634 on Nov 20, 2024.

Long-term price forecasts for GAME are mostly bullish.DigitalCoinPrice 

 of $0.65 in 2027 and $0.99 in 2030, whileCoinCodex 

 at around $0.202 in 2027, and rise to $0.629 in 2030.

GAME isn't the only AI agent token on Virtuals Protocol. The protocol supports a variety of applications and use cases that focus on AI agent technology, each of which may have its own token. Excluding the main platform-wide cryptocurrency, VIRTUAL, the leading tokens within the protocol's ecosystem include 

As of Jan 14, 2025, GAME is the second-highest-ranked token in the Virtuals ecosystem by market cap, behind AIXBT, the token of the AI agent-based market intelligence solution AIXBT. However, if ranked by 

 (TVL), GAME is actually the top token on the protocol, with a current TVL of $24.85 million.

GAME by Virtuals is a convenient tool for blockchain developers to launch powerful AI agents — intelligent objects that can perform diverse functions on social media platforms, gaming environments and within a wide variety of other applications. Its framework makes it easy to create X-based agents, and for other platforms and more sophisticated needs a skilled developer has numerous functions and utilities within GAME to play with.

The crypto market also seems impressed with GAME by Virtuals, judging by the GAME token's early performance. As the AI sector, particularly its AI agent niche, continues to flourish and capture the business world's attention, the GAME framework is likely to find more use cases and eager adopters in the AI developer community.

Advanced

GAME by Virtuals .png

GAME by Virtuals (GAME): Your Gateway to Advanced AI Agent Development

Bitcoin liquid staking is a DeFi mechanism that enables BTC holders to earn passive yields. Learn more about how it works in this article.

The rise of Bitcoin liquid staking marks a significant evolution in cryptocurrency yield generation. At the core of this innovation is Babylon, a non-custodial infrastructure that serves as the foundation for Bitcoin liquid staking protocols like Lombard and pSTAKE. By building on Babylon, these protocols enable BTC holders to earn staking rewards while maintaining liquidity, BTC holders to earn rewards while retaining their assets’ liquidity, bridging the gap between Bitcoin's store-of-value proposition and yield opportunities within 

This article explores how Bitcoin liquid staking works, examines its advantages and risks, and considers whether it’s worth trying. We also analyze the leading Bitcoin liquid staking platforms driving adoption in this rapidly growing ecosystem.

Bitcoin liquid staking is a DeFi mechanism that enables BTC holders to earn passive yields by participating in 

 (PoS) networks and receive tradable tokens that maintain their Bitcoin's liquidity and utility in the broader DeFi ecosystem.

Liquid staking protocols open new yield-bearing opportunities in the Bitcoin ecosystem. While Ethereum liquid staking generates yields through network validation rewards, Bitcoin liquid staking creates returns by securing other blockchain networks, and through 

 that expand the utility of BTC beyond its primary function as a store of value.

Bitcoin liquid staking operates through a straightforward process that bridges traditional Bitcoin holding with DeFi functionality. When users stake their Bitcoin, they interact with specialized DeFi protocols that generate yield while maintaining liquidity.

First, users deposit their Bitcoin into a liquid staking protocol, where it's securely stored using various methods, which can include multi-signature wallets or other security mechanisms depending on the platform.

Users begin by depositing their Bitcoin into their chosen liquid staking protocol, which secures deposits through various methods like 

 or other security mechanisms. In return, they receive 

 (LSTs) representing their staked BTC on a 1:1 basis.

These LSTs can be used across various DeFi applications while the underlying Bitcoin works to secure PoS networks through protocols such as 

. The staking rewards are generated through point systems, protocol incentives or network fees, depending upon the specific Bitcoin liquid staking platform used.

, users' staked Bitcoin helps secure their networks. Rewards are typically distributed daily through the protocol's native tokens, which users can claim while holding their LST positions.

The unstaking process is equally straightforward — users can redeem their LSTs for their original Bitcoin whenever they choose, subject to any applicable unbonding periods or protocol-specific conditions.

Bitcoin liquid staking offers unique opportunities for yield generation, but it comes with its own set of risks that investors should carefully evaluate.

The Bitcoin liquid staking landscape offers diverse options for BTC holders seeking yield opportunities. Following are the top platforms.

Lombard transforms Bitcoin into a yield-generating asset through its LBTC token on Ethereum, with over $1.5 billion in 

 (TVL). The protocol integrates with established DeFi platforms like Morpho, Pendle and Symbiotic, enabling LBTC holders to access lending, borrowing and 

 opportunities. A 5% fee applies to staking rewards.

Following a successful private beta that attracted $230 million from over 4,000 institutional and individual users, Lombard has entered its public beta. Lombard maintains strict security standards through regular audits and a self-custodial model, ensuring LBTC remains fully backed by Bitcoin at a 1:1 ratio.

Recently launched by the Core Foundation, LstBTC is an 

 blockchain. The protocol enables daily rewards in CORE tokens through a dual staking model, whereby users can stake both Bitcoin and CORE tokens for enhanced yields.

Since its launch in April 2024, Core has attracted over 5,500 BTC (around $500 million) in staked assets and built a comprehensive 

 ecosystem. The protocol leverages Bitcoin 

 power for security, with about 55% of miners contributing to network stability.

 integration, allowing users to earn rewards from Layer 2 activity. The protocol converts deposited BTC into stBTC tokens for DeFi applications, enabling its users to earn daily Lightning Network routing fees without managing node infrastructure.

With over 105 active channels and the capacity to process over 18,000 

 (TPS), Stroom Network is secured by established validators, such as P2P.org and Allnodes. Stroom' 

 structure and multisig system ensure decentralized governance while managing Lightning Network integrations.

Babylon is an infrastructure protocol that enables Bitcoin holders to secure PoS networks through BTC staking without requiring 

 or third-party custody. The protocol has accumulated nearly 24,000 BTC in its ecosystem since launching in 2024.

Babylon’s platform prioritizes security through its innovative timestamping protocol, and partnerships with established validators like P2P.org. Though offering more conservative yields than competitors, Babylon's self-custodial model and robust security features have attracted institutional users seeking to put their Bitcoin to work while they maintain control of their assets.

 simplifies BTC yields through Bitcoin staking on Babylon's infrastructure. With over $35M in TVL, the platform offers two core offerings: a fixed-yield earn product (similar to Bybit Earn) accessible to all users and a Bitcoin LST, called YBTC, that offers tailored Bitcoin yield solutions to institutions.

Users can earn staking rewards from Bitcoin-secured networks by staking native BTC through 

. YBTC, a yield-bearing ERC-20 token on Ethereum backed 1:1 by BTC, connects with BNB Chain, Corn, B Squared, and Bitlayer through LayerZero integration.

Institutions can use YBTC in the BTCfi ecosystem to generate additional yields from DeFi protocols focused on restaking, yield farming, and more. PSTAKE — the protocol's incentivization, governance, and staking token — trades on exchanges like Bybit and can be staked on the Base L2 chain to earn Bitcoin rewards for participating in protocol and community activities.

Bitcoin liquid staking is worth considering if you:

Before participating, investors should carefully evaluate platform security, understand the technical aspects of liquid staking and assess their 

. Additionally, smart contract vulnerabilities and LST price fluctuations present real risks that need to be considered against potential rewards.

Choose a platform that aligns with your expertise level and goals. Established protocols like pSTAKE suit experienced DeFi users, while newer participants might prefer user-friendly platforms, such as Core's LstBTC. Start with smaller amounts of assets to familiarize yourself with the mechanics before committing significant capital.

Bitcoin liquid staking represents a significant evolution in Bitcoin's utility, offering holders new ways to earn yields while participating in the broader DeFi ecosystem. While the technology and protocols are still being developed, growing market adoption and continued innovation suggest a promising future for the Bitcoin liquid staking sector.

Intermediate

bitcoin liquid staking.png

Bitcoin Liquid Staking: New Yield Opportunities for BTC Holders

BlackRock has launched the iShares Bitcoin ETF (IBIT) on Cboe Canada, offering Canadian investors access to Bitcoin through brokerage accounts.

The S&P 500 rose 0.16% as focus shifts to inflation data and earnings reports from major banks. Coindesk Indices, an index measuring broader cryptocurrency market performance was down by 0.16%, with Bitcoin and Ether dropping by 1.14%  and 4.65%, respectively in the past 24 hours.

Today's top performer is AAVE, which surged 4.3% after the announcement of Aave and GHO's expansion across networks for broader integration.

Aave (AAVE), founded in 2017, is a decentralized lending platform on Ethereum for lending, borrowing, and earning interest on 17 cryptocurrencies. It uses smart contracts, collateral for loans, and aTokens for interest, along with features like instant loans. Aave is 

 to multiple networks, with ARFCs passed for Linea, Celo, and World Liberty Finance, while Sonic, Mantle, BOB, and Rootstock are in earlier stages. GHO stablecoin is also growing, with expansions to Avalanche and Base already approved. Aave and GHO aim for widespread integration.

 the iShares Bitcoin ETF (IBIT) on Cboe Canada, offering Canadian investors access to Bitcoin through brokerage accounts. The ETF mirrors Bitcoin's price performance by investing in the U.S. iShares Bitcoin Trust ETF, which holds long-term Bitcoin assets. This launch highlights BlackRock’s focus on innovation and simplifying Bitcoin exposure by addressing operational and custody complexities. Cboe Canada, known for pioneering financial products, emphasizes its role in expanding the crypto ecosystem. IBIT and IBIT.U join seven other iShares ETFs on Cboe Canada, enabling investors to trade via standard investment channels.

Yesterday, BTC Spot ETFs experienced outflows totaling $313.6M, including $89M from GBTC and $224.6M from non-GBTC sources.

 its governance token, $ANIME, in January 2025 with a total supply of 10 billion (7.69 billion initially circulating). Community allocation is 50.5%, including 2% for Hyperliquid stakers, Kaito yappers, and Arbitrum users. Completing Azuki's points tasks might help with eligibility for the airdrop.

BlackRock Launches iShares Bitcoin ETF on Cboe Canada for Simplified Crypto Access

Bybit Learn

Options

Bitcoin

Bitcoin options allows you to own BTC without having to buy the asset itself. Discover what Bitcoin put and call options are, what benefits they bring to the table, and how to trade BTC options.

The world of investing is characterized predominantly by the maximization of profits. Every year, numerous innovations spring up to help investors profit in whatever capacity and in whichever field an opportunity presents itself. One such financial instrument is called Bitcoin options.

Though popularized only in recent times, the concept of options trading 

. This concept is founded on a financial theory that gives certain permissions and withholds certain rights. Essentially, options are contracts that give an investor or trader holding an option the right (not the obligation) to buy or sell an asset at a predetermined price and date.

, and a key attribute of assets that fall into this class is dependency. This means that the value of options is derived from that of other instruments, such as cash, 

While the concept can be technical and rather confusing, one thing is for sure: Options are a profitable tool that can definitely become an investor's best friend. In this article, let’s discuss everything you need to know about a particular type of crypto option: 

 (BTC) has grown to become a household name, evoking a wide range of emotions: curiosity, hope, fear and skepticism ... and much more.

Bitcoin’s growth over the past 12 years took the world by surprise. First appearing in a white paper in October of 2008, pseudonymous author(s) 

 introduced a concept that would later give centralized financial institutions worldwide a run for their money.

Birthed out of a desire to correct the flaws and misappropriations of the existing financial systems, Bitcoin arrived as a solution to scamming middlemen and unfair financial regulations. BTC grew from a value of $1 in 2011 to its all-time high of $68,000 in Nov. 2021. Currently, BTC’s price is hovering around $30K.

Since 2011, Bitcoin has grown from its first use case (as a 

) to being adopted by millions of users and corporations worldwide, 

, with more countries looking to follow suit. With the 

 in the spring of 2024, Bitcoin’s price may soon regain and even surpass its glory.

 exist similarly to Bitcoin futures in the form of derivatives. They can be defined as "contracts that give an investor or trader the right to buy or sell Bitcoin (but not the obligation) at a given price (strike price) and a specific date (expiration date)." 

Bitcoin options trading is a preferable mode to buying Bitcoin because the cost incurred to buy an option (a premium) is less than that of the actual asset. As opposed to buying and holding Bitcoin, Bitcoin options give you the 

 to take speculative positions (i.e., upward or downward) on BTC's price movement.

Considering how volatile the cryptocurrency asset is, Bitcoin options open up an avenue for investors and traders to speculate the asset's price at a fraction of the cost. Still, they allow you to profit from the downward movement in price without actually suffering the loss of holding the currency itself. Bitcoin options also allow you to profit from a spike in price as if you were holding the actual 

 in Bitcoin that creates wide profit margins, losses are limited only to the premium paid to open the positions. This uncapped profit potential and capped losses are some of the best features of Bitcoin options trading that make it attractive and in demand.

A Bitcoin call option is an agreement that allows a 

 owner to buy an agreed-upon amount of Bitcoin for a particular price (also known as the "strike price") at a particular time (expiration date).

Consider the following (hypothetical) scenario: Let's say you believe that the price of a piece of land will go up in a couple of months. You discover that you can reach an agreement with the seller that would allow you to purchase the land at a particular price, and mandate the seller to sell it to you ... all this at the small cost of a fee (premium). Would you accept the offer? Most probably. This same logic applies to Bitcoin call options. 

To clarify, the agreement merely gives you the "option" to buy the land at that time; it isn't mandatory. If you don't have the funds at that time to close the deal, all you have to do is forfeit it and lose the premium paid.

 gives the contract owner the right to sell Bitcoin at an agreed-upon price (strike price) later at a predetermined time (expiration date). In other words, it gives you the privilege of selling your 

. It usually follows a downward bias — that is, when an investor thinks the price of Bitcoin will decline rapidly or is bound to do so over a certain time frame.

In other words, this contract becomes valuable whenever the actual Bitcoin price falls below the strike price, before or on the expiration date. The holder can choose to exercise the option and sell Bitcoin at the higher strike price, even if the market price is lower. This allows traders to profit from a declining Bitcoin market, as they can sell at a better price than the current market value. And similar to a call option, the maximum risk a trader can absorb is the premium paid if the Bitcoin price doesn’t drop below the expected strike price.

Why Would Anyone Buy a Bitcoin Put Option?

To help you understand better, here's an example:

Assuming Mr. Stone is a fruit seller who notices that fewer people buy more fruit at a particular time of the year, which forces the price of fruits down. Throughout this period, he consistently runs his business at a loss because he has to sell his produce at a lower price than what he bought it for. 

One day, he hears of a company that wants to buy his fruits at a predetermined price, even when that price is lower than the market rate. This opportunity allows him to sell his goods to them at that price and hedge against decline, even when other fruit sellers have no choice but to make do with less-than-ideal selling rates. 

Mr. Stone and the company enter an agreement that mandates the company to buy his goods at the predetermined price within that period. This contract is sealed with a fee (premium). If the company refuses to act on the contract, Mr. Stone gets to keep the premium that was paid.

It's worth noting that Mr. Stone gets to decide the premium paid based on the perceived demand for his fruit at that time. The same logic applies to Bitcoin put options.

Bitcoin vs. Bitcoin Options: Profiting in Bear and Bull Markets

We already know why BTC is sold and is currently the biggest cryptocurrency by 

: High demand. However, Bitcoin options (and other derivatives) are sold because they serve certain specific purposes, which we shall explore in detail below.

Hedging is one of the most common reasons for trading futures or contract options.

, picture a garden close to a river or water pathway. It's safe to presume that such a piece of land will, sooner or later, get washed away by the force of water currents. In such a situation, the owner of the land builds a fence or hedge around it to shield it from erosion.

This example is a close, albeit simplistic, representation of hedging in the financial markets. Investors (and miners of Bitcoin) hold an asset whose value could be “eroded” or "washed off" by the forces of 

. An options contract "shields" the value of the underlying asset — in this case, Bitcoin — by "locking" its value, i.e., the price at which Bitcoin can be traded for money.

Traders and investors use contracts such as options to express their short-term sentiments (

To understand this better, remember that when an asset is bought, it’s usually believed that the asset will be more valuable in the future. When the asset records a substantial increase in value, you can profit by selling off an amount of it. 

 run is imminent in the upcoming months? Although the underlying asset's price may bounce back after a while, by purchasing a put option, you would maximize your chance to make some profit. 

Here’s another reason Bitcoin options are increasingly traded over Bitcoin itself: Trading an options contract provides you with the benefit of controlling a larger trade size than the amount of capital you used to initiate the position. For example, for a relatively small premium amount of, say, $500 or $1,000, you can control one bitcoin, which could be worth $20,000 or more.

Expiration dates refer to the agreed date on which the contract option — the option of either buying or selling — is to be exercised. Note that not every Bitcoin options contract can only be fulfilled on its expiration date; some can, in fact, be exercised before the expiration date. Below, let's look at the two methods of contract fulfillment.

European-style options contracts mandate the holder to fulfill only the terms of the agreement on the date of expiration. Even if a contract is 

 (ITM), the holder can't exercise their option until the set date, on which the fortunes of such a contract may have reversed.

A European-style contract requires higher accuracy in speculation than its American counterpart. At the time of this writing, major Bitcoin options trading platforms offer only European-style contracts.

Options contracts styled in this manner give the holder the privilege of exercising the contract before the 

. If a contract is ITM, the holder can decide to use their trade option, thereby making a profit.

The American way of doing things implies that a much lower degree of accuracy in speculation is required. Making a profit requires the contract to be ITM any time: Between the date entered and the expiration date.

OTM, ITM and ATM are terms that are frequently discussed in options trading. Although they share fundamental similarities, they function differently in diverse scenarios. In fact, these terms describe the relationship between the current Bitcoin price and the strike price of an option.

An out-of-the-money (OTM) Bitcoin option refers to a current market price for Bitcoin that isn’t favorable for an option contract holder to execute their right. For example, if the strike price of a put option is $30,000, but Bitcoin is currently trading at $34,000, the put option is considered OTM. In this case, it wouldn't make financial sense for the contract holder to sell Bitcoin at $30,000 when the value of 1 BTC is higher on the spot market.

In contrast, an in-the-money (ITM) Bitcoin option is advantageous for an option holder when the current market price of 1 BTC is below the strike price. Using our previous example, if the strike price of a put option is $30,000 and Bitcoin is trading at $34,000, the put option would be considered ITM. The holder can exercise the option and sell their BTC at the higher strike price, even though the market price is lower.

When the current Bitcoin price is close to the option's strike price, an at-the-money (ATM) option works in favor of the contract holder, regardless of the market situation. For example, if the strike price is $30,000 and Bitcoin is currently trading at around $31,000, the put option is ATM. The option holder has to make a decision based on market predictions to determine whether it would be beneficial to exercise the option or not.

Depending upon the contract that they hold, traders can utilize these contracts to hedge against market unpredictability.

"Holding and writing" in options trading is another way to express the act of buying and selling. Like buying and selling, there are two sides to an options contract; On one side is the "holder," or buyer, and on the other is the "writer," or seller. This two-sided concept covers both put and call options, meaning you can go long or short on both.

The connection between a holder and a writer is the 

. When an investor decides to "hold" an option, they must pay a premium that gives them the right to buy or sell Bitcoin.

The reverse is true of "writing." When an investor decides to “write,” they sell their right to decide to the holder. If the holder decides to act on the options contract, the seller will have to keep their word and relinquish their right. They only get paid the premium for the decision.

Certain terminologies are used to understand the factors responsible for an option's price in Bitcoin options trading. These terms are called the "Greeks." They decide how much you pay to open an options contract as a holder or how much you receive selling an option as a writer.

Here are the five members of the Greeks: 

Bitcoin Options vs. Bitcoin Spot Trading vs. Bitcoin Derivatives

Depending on your trading interest, these contracts serve different purposes and yield different financial outcomes. When comparing trading options, it's crucial to understand the underlying trading mechanics and the flexibility from which these contracts derive their value.

A Bitcoin option gives traders the right, but not the obligation, to buy (call option) or sell (put option) BTC at a predetermined price (strike price) on or before a specific date (expiration date). When compared to spot trading, options provide a more flexible trading opportunity with calculated risks, as traders may choose whether or not to exercise the option if it becomes unprofitable. The maximum loss is limited to the premium paid for the option contract.

Traders who seek to hedge their positions may prefer options, as they allow them to speculate on Bitcoin's price movements or take advantage of market volatility without committing to buying or selling the asset outright.

Traders involved in spot trading prefer to buy or sell actual Bitcoin on cryptocurrency exchanges at the current market price, with settlement and ownership taking place immediately. Unlike options or futures trading, the spot market allows traders to directly own the underlying asset for transactions or long-term investments.

When compared to options, spot trading is best suited for beginning and intermediate traders who want direct exposure to Bitcoin and are interested in using it for various purposes or holding it for potential long-term gains.

Bitcoin derivatives are financial contracts that derive their value from the underlying price of Bitcoin. These include Bitcoin futures and perpetual swaps. For example, Bybit Futures Contracts allow traders to trade contracts with a specified expiration date, while Bybit Perpetual Swaps don’t expire and can be held indefinitely.

In other words, derivatives enable traders to speculate on Bitcoin's price without owning the actual asset. They offer 

, allowing traders to control larger positions with a smaller amount of capital. Due to leverage, derivatives carry higher risk and complexity than spot trading or options. Thus, they’re more suitable for intermediate and advanced traders.

Which Is Better for Beginners and Intermediate Traders?

Ultimately, the best choice depends upon an individual's knowledge, trading goals and risk tolerance. Beginners should start with spot trading to get acquainted with Bitcoin, and as they progress, they can explore options and derivatives with proper research and understanding.

Bitcoin options are offered on several exchanges, which have different methods of allocating contracts. For example, on a 

, the options contract is upheld directly between the customer and the exchange.

To enter a contract option, the user chooses the amount of Bitcoin they wish to trade the options contract on, thus determining the premium. Since the trade takes place between the user and the exchange (using a computer program), if the value being lost by the user were to pass a threshold, the user would be 

, with the only money lost being the premium.

On some other exchanges, a user "writes" a contract and waits for their contract to be matched by another who orders to purchase a contract with similar terms to the writer. The exchange regulates this trade, and a fee is charged to ensure fairness. 

 (see image above). For a step-by-step guide on how to do so, 

, options can keep their rewards at reasonable levels when implemented carefully. To the Bitcoin investor, Bitcoin options are a good way to speculate on the 

 of Bitcoin. Even if BTC is bleeding red, 

To the investor who wants a "feel" of the market without prior experience with Bitcoin or cryptocurrencies, no worries: There's an option (pun intended) for you in the form of Bitcoin options contracts. (Editor’s note: Please ensure that you’re educated on the risks involved. Only go for options trading if you’re comfortable stomaching the level of risk).

Options trading often involves predefined losses (limited to the premium paid), whereas spot trading exposes traders to potentially unlimited losses if the market moves significantly against their position. However, the complexity and limited time frame of options can make them riskier for inexperienced traders.

Overall, both options and spot trading carry risks, which can vary based on the trader's approach, knowledge and risk management strategies. It's crucial for traders to understand the risks associated with their chosen trading method thoroughly and to trade within their risk tolerance and financial capacity.

What Are Bitcoin Options: How to Own The World’s No. 1 Crypto for Less

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