On Friday, options for Bitcoin (BTC) valued at billions of dollars are set to expire on Deribit. Despite the substantial volume, the exchange indicated to CoinDesk that this event may not lead to significant market volatility.
This Friday, over 139,000 BTC option contracts are slated for settlement, totaling $12.13 billion, which constitutes nearly 45% of the overall active BTC contracts across all expirations, as reported by Deribit metrics.
A significant portion, more than 65%, of the current open interest is found in call options, which allow buyers to gain a disproportionately bullish exposure, while the remaining is in put options that provide protection against downside risks.
Historically, quarterly expiries of this magnitude are associated with increased market volatility; however, this time may differ based on the ongoing decrease in the bitcoin 30-day implied volatility index (DVOL). This index has fallen from an annualized 62% to 48% in the weeks approaching the expiry, indicating lower expectations for volatility.
Further evidence of a stable funding environment is apparent in the annualized perpetual futures basis, which stands around 5% on the exchange.
Luuk Strijers, CEO of Deribit, shared with CoinDesk, “Even with the sizeable expiry, the overall situation—characterized by low DVOL, moderate basis, and balanced options positioning—suggests a relatively calm expiry unless unexpected external factors arise.”
Downside Hedging Observed
The options skew, which indicates the difference in implied volatility between calls and puts, reflects concerns about potential downside ahead of Friday’s expiry.
Nonetheless, the broader perspective remains positive.
“The 3-Day Put-Call Skew is Slightly Positive, indicating some demand for immediate downside protection, while the 30-Day Put-Call Skew appears slightly Negative, suggesting a more bullish stance in the medium term,” noted Strijers.
Additionally, ether (ETH) options worth $2.8 billion are also set to expire on Friday.
