Bitcoin Faces Volatility Test as $10 Billion of Options Near Expiry

About $10 billion of Bitcoin options are due to expire on June 27, a setup that could fuel market volatility.

Bloomberg reported on June 25 that roughly $10 billion of Bitcoin options contracts on Deribit, the world’s largest crypto options exchange, will expire on June 27. The total amounts to about 37% of current open interest.

Market participants had been betting on medium- to long-term gains, but Bitcoin’s recent slide has turned those positions unfavorable, according to Jean-David Pequignot, Deribit’s chief commercial officer.

Bitcoin recently fell below $60,000, touching its lowest level since October. It has since rebounded to the low-$60,000 range, but it remains below its 200-week moving average, prompting concern that it may be entering a long-term bear market.

The put-to-call ratio has risen to 0.83, indicating that bullish bets still outnumber bearish ones. Even so, a large share of call options now sit above the current market price and are effectively out of the money. Put options, by contrast, are concentrated in the $60,000 to $65,000 and $70,000 to $75,000 ranges, leaving downside bets in a relatively stronger position.

Options expiry alone does not determine market direction, Adam Haeems, chief investment officer at Tesseract Group, said. But a large expiration at quarter-end, combined with thin summer liquidity, could push prices excessively in one direction.

Market participants are looking past the immediate post-expiry period and instead treating the first week of July as the more important inflection point. After quarter-end position squaring and deleveraging run their course, the market’s underlying direction may become clearer.

The broader macro backdrop remains unfavorable. US spot-Bitcoin ETFs have recorded about $3 billion of net outflows this month, while concerns about Strategy’s financial health have also weighed on sentiment.

The options market is growing more bearish over the longer term, according to Griffin Ardern, co-founder of Prymal Fund. A hawkish Federal Reserve and elevated Treasury yields point to tighter liquidity, an environment that could leave Bitcoin at a relative disadvantage.