Bitcoin’s price swoon has spurred a rush into put options as traders seek protection against further declines. The $75,000 put, representing a bet on a BTC price drop below the level, is now just as popular as the $100,000 bullish call option. This surge in demand for lower-strike puts contrasts with the post-Trump-election pattern of enthusiasm for high-strike calls.
Bitcoin’s price crash has shifted the market vibe, with bets on it sliding further now just as hot as moonshot plays over $100,000. The leading cryptocurrency by market value has dropped nearly 10% this week, reaching nine-month lows below $78,000, according to CoinDesk data. The result: the dollar value of the number of active bitcoin put options contracts at the $75,000 level listed on Deribit now stands at $1.159 billion, almost matching the notional open interest of $1.168 billion locked in the $100,000 call option.
Deribit is the world’s largest crypto options exchange by volume and open interest, with one contract representing 1 BTC. There has been a massive surge in put buying over the past 48h (sensitivity at peak), right as BTC spot crashed from 88k to 75k. Puts are seeing more activity than calls.
The $75,000 put is the most popular bearish play, significant open interest is also seen in puts at strikes of $70,000, $80,000, and $85,000, whereas higher-strike calls, except the one at $100,000, lack similar activity. The erstwhile bullish positioning likely stemmed from hopes that valuations would surge with Trump delivering on his campaign promises of pro-crypto regulations. Beyond the macro pressures, the delay in the crypto market structure bill has likely piled on the frustration.
Leave a Reply