"Funds Concentrate in $20,000 Bitcoin (BTC) Put Options…Rising Demand for Extreme Downside Protection"

JH Kim

Summary

It was reported that funds are concentrating in $20,000 strike Bitcoin put options, with a notional value of about $596 million, the third-largest among all options.
It said that amid heightened geopolitical risks in the Middle East, market participants are focusing on a sharp-drop scenario as they brace for the possibility of a more than 70% decline in Bitcoin’s price.
However, it analyzed that the inflow into the put options is more likely a strategic position for premium capture or volatility trading than a simple bearish bet, and with the put/call ratio at 0.63, call options still dominate.

Forecast Trend Report by Period

Funds are concentrating in Bitcoin (BTC) put options with a strike price of $20,000 in the Bitcoin options market.

On the 19th (local time), cryptocurrency-focused media outlet CoinDesk, citing Deribit data, reported that the notional value of the put options is about $596 million, ranking as the third-largest among all options.

While the largest positions are call options with strike prices of $125,000 and $75,000, it is notable that among put options, funds are piling into the extreme strike level of $20,000.

This suggests that amid expanding geopolitical risks in the Middle East, market participants are preparing for a sharp-drop scenario. For the option to pay off, Bitcoin would need to fall more than 70% from its current price.

However, the outlet analyzed that the inflow is more likely a strategic position to capture premiums or trade volatility rather than a straightforward bearish bet.

In fact, the put/call ratio for Bitcoin options nearing expiry stands at 0.63, indicating that call options still dominate.