Bitcoin: $15.6 Billion in Options Set to Vanish From the Books

Bitcoin is approaching a major derivatives expiration. On Friday, September 25, about 182,000 BTC in options, representing $15.6 billion in notional value, will expire on Deribit. Calls dominate with 106,200 BTC, compared to 75,900 BTC in puts. The settlement occurs while Bitcoin was trading around $85,000 at Deribit’s snapshot, significantly above the “max pain” level set at $76,000.

182,000 BTC arrive at expiration on Deribit

The figure seems huge. It is, but it must be read correctly. The $15.6 billion corresponds to the notional value of the contracts. This amount will not be transferred between buyers and sellers on Friday. Some options will simply expire worthless, depending on their strike price and Bitcoin’s price at settlement.

The size of the expiration has significantly increased since August. On August 28, Cointribune reported an expiration of $6.44 billion in Bitcoin options, involving 81,700 BTC. On Friday, the number of underlying contracts exceeds 182,000 BTC.

Positions remain more oriented towards calls: 106,200 BTC compared to 75,900 BTC placed on puts. The put/call ratio is thus 0.71.

This imbalance does not mean that all traders are betting on a Bitcoin rise. Options also serve to hedge a portfolio, sell volatility, or build more complex strategies.

The trend had nevertheless started to change ahead of this expiration. Last week, the Bitcoin options market already showed a cautious return of optimism, with more bullish positions across several maturities.

The $70,000 level concentrates the positions

The busiest level is not around $85,000. It is at $70,000. Deribit records 8,705 BTC in calls and 7,653 BTC in puts at this strike price. This is the strongest concentration on both sides. Other large bullish positions are at $90,000, with 7,222 BTC, then at $100,000 with 6,950 BTC.

For bearish protections, $60,000 concentrates 5,571 BTC in puts. The $75,000 level gathers 4,257.

Between these is the famous max pain: $76,000. It corresponds to the level at which the greatest number of Bitcoin options would expire worthless. BTC was trading about $9,000 higher during the Decrypt snapshot. This does not mean Bitcoin must return to $76,000 before Friday.

Previous expiries have already shown this. At the end of August, max pain was between $68,000 and $70,000 while Bitcoin approached $80,000. The settlement did not cause a sharp return to that zone.

The figure is mainly watched for market makers’ hedges. A call seller can buy Bitcoin when BTC rises to reduce their exposure. After expiration, some of these hedges disappear or are rolled forward to another expiry. With $15.6 billion in notional value, changes can be noticeable.

Friday also brings several macro tests for Bitcoin

Deribit will settle contracts at 8 AM UTC on Friday. A few hours later, the U.S. durable goods orders and the final September reading of the University of Michigan consumer confidence index will be released. CME September Bitcoin futures contracts will also expire at 3 PM UTC.

The calendar falls one week after the Federal Reserve raised rates by 25 basis points. U.S. data are therefore closely followed for what they may change in rate expectations.

Bitcoin is already familiar with such busy days. In June, nearly $13 billion in BTC options expired as the market was coming out of a strong correction. This time, the situation is different. Bitcoin returns from a marked rebound and calls outnumber puts. Friday will reset the counters for a significant part of the options market. 182,000 BTC will be involved at 8 AM UTC. Afterwards, the hedges associated with these contracts may disappear, be closed, or be moved to subsequent expirations. The $15.6 billion therefore does not predict Bitcoin’s direction. It mainly indicates that a large part of the current positioning comes to an end at the same time.