Bitcoin and ether options worth billions of dollars are set to expire on Friday, with traders maintaining a bullish bias while increasingly hedging against downside risks.
Bitcoin options with a notional value of roughly $8.5 billion will expire on Deribit at 08:00 UTC on Friday. Deribit is the world’s largest crypto derivatives exchange by trading volume and open interest. The figures represent the U.S. dollar value of outstanding options contracts, with each contract tied to one bitcoin or one ether.
Options markets have expanded rapidly since the 2020 COVID-induced crash, as institutional participation grew and traders increasingly used derivatives for hedging and yield strategies. Call options typically reflect bullish expectations, while put options are used to profit from or protect against price declines.
Positioning ahead of the expiry remains skewed toward calls, according to the put-to-call ratio.
“The put-call ratio for this expiry stands at 0.56, indicating that overall positioning into month-end remains tilted toward bullish calls,” Sidrah Fariq, global head of retail sales and business development at Deribit, told CoinDesk via Telegram.
The bullish bias suggests traders had been anticipating stronger price action in January. Bitcoin, however, has risen only about 2% so far this month, according to CoinDesk data.
Momentum could pick up before month-end if Wednesday’s Federal Reserve rate decision signals a more accommodative liquidity outlook. Bitcoin, like technology stocks, has historically benefited from lower interest rates and easier financial conditions.
At the same time, traders are actively purchasing put options ahead of the Fed decision to hedge against potential near-term volatility.
“Recent flow shows heavy use of put diagonal calendar spreads, alongside concentrated downside activity in Jan. 30 strikes, with notable interest in the $88,000 and $85,000 bitcoin puts over the past 24 hours,” Fariq said.
“With markets largely expecting the Federal Reserve to hold rates steady, traders appear to be hedging against event-driven volatility rather than positioning for a policy-induced selloff,” she added.
Ether options worth about $1.3 billion are also set to expire on Friday alongside their bitcoin counterparts.
While large monthly and quarterly expiries can trigger short-term price fluctuations, they are unlikely to have a lasting market impact. Bitcoin’s $8.5 billion options expiry, for example, represents less than 1% of its roughly $1.7 trillion market capitalization, limiting the potential for sustained price disruption.
