A record $18 billion in Bitcoin and Ethereum options expire today, sparking anticipation of sharp market moves and potential volatility.
Today marks a historic moment for the cryptocurrency market, with $18 billion in Bitcoin and Ethereum options contracts set to expire, the greatest expiration ever recorded. This development could lead to unexpected volatility and significant opportunities for traders and investors.
For Bitcoin, the total value of expiring options reached approximately $14.38 billion, while Ethereum options account for approximately $3.7 billion. The volume of contracts expiring today is striking: 88,537 Bitcoin contracts and 796,021 Ethereum contracts, several times higher than last week’s figures. Such an increase reflects increased activity and traders’ anticipation of profits or risk mitigation.
Bitcoin’s put-to-call (P/C) ratio is currently 0.69, a sign of optimism as more traders place bullish bets. Ethereum ratio fell to 0.41, suggesting even greater confidence in ETH price rises. Lower P/C ratios indicate that more calls (bets on price increases) are purchased compared to puts (bets on price declines).
Currently, BTC and ETH are trading well above their respective peak prices. For Bitcoin, this price is $85,000, while for Ethereum it is $3,000. The “maximum pain price” represents the level at which option buyers suffer the greatest losses at expiration, often leading to market adjustments as prices gravitate toward that point.
David Lawant, head of research at FalconX, highlighted the rise in hedging sentiment as a possible reason for the upward trend in Bitcoin’s P/C ratio in the final quarter of 2024. “The demand for protection in the event of decline has increased,” he said, noting that traders may be looking to protect their year-end performance metrics. In October, Bitcoin’s P/C ratio for options expiring on December 27 was just 0.35, but has now doubled to over 0.70.
Ethereum sentiment shows a mixed trend. ETH’s P/C ratio has declined sharply from 0.97 in late October to its current level of 0.41, reflecting a growing uptrend. This change indicates traders’ confidence in ETH’s potential to maintain or increase its price.
With leveraged positions currently favoring upside, sharp market movements could occur, especially if prices deviate significantly from expectations. Analysts suggest that this record expiration could shape the market narrative for 2025, as traders await further developments with increased anticipation.
As the year draws to a close, the crypto market is bracing for possible price swings following today’s monumental options expiration. Investors should remain vigilant as the dynamics of these expiring contracts could set trends in the months to come.
