Record $18B Bitcoin Options Expiry to Curb Volatility
Analysts at Bitfinex warn that a record $18 billion Bitcoin options expiry this week will likely suppress BTC volatility. A high concentration of call options between $115k and $125k creates a high-gamma environment that pins the BTC price near those strikes. Leading up to expiry, dealers dynamically hedge delta by selling spot Bitcoin, which reduces realized volatility. Historical data shows that large Bitcoin options expiries often lead to muted trading before expiration, followed by a clearer price move in the 24–72 hours post-expiry. Following the Bitcoin options expiry, natural price discovery can resume, potentially triggering a directional move.
Neutral
Large Bitcoin options expiries, like this record $18 billion event, traditionally suppress volatility as market makers hedge delta by selling or buying spot BTC to remain neutral. This dynamic hedging ‘pins’ the price within the strike range with the highest open interest, leading to muted, range-bound trading ahead of expiry. Historical precedents—from previous multi-billion-dollar expiries in 2021 and 2023—show similar patterns: subdued volatility before expiration followed by a directional move within 24 to 72 hours post-expiry. Therefore, the immediate market impact is neutral, with limited upside or downside until positions roll off. However, once the options expiry passes, natural price discovery resumes, potentially resulting in sharper bullish or bearish moves depending on underlying market sentiment and macro factors.