Year-end positioning unwinds have reset Bitcoin’s options landscape, allowing the market to enter the new year with a notably cleaner sheet.
Leverage accumulated into December was flushed through month-end expiry, and over the first weeks of January, options structures have progressively rebuilt as traders reposition ahead of the year’s first major expiration.
As Bitcoin crossed the $95,000 threshold that had capped price action for nearly three months, the short-lived rally materially altered market sentiment and underlying derivatives structure, shifting positioning away from defensive hedges toward renewed risk expression.
However, the long-awaited range break was cut short before it could properly develop. Ongoing macro uncertainty, from tariff threats around Greenland to renewed stress in global monetary plumbing, has provided intermittent tailwinds, weighing on Bitcoin’s ability to fully extend its mid-January breakout.
Compounding this dynamic, Bitcoin continues to trade in the shadow of gold resurgence as the dominant store-of-value asset. Gold has decisively reclaimed the spotlight, printing fresh all-time highs for nine consecutive sessions.
As capital gravitates toward traditional hedges, Bitcoin’s relative underperformance underscores a temporary repricing of volatility expectations rather than a breakdown of its longer-term thesis.
The year-end cliff
Year-end expiries triggered a sharp reset across Bitcoin’s options market.
Notional open interest was effectively halved, collapsing from $48.68bn to $26.16bn into the December expiry, the largest year-end options cliff in Bitcoin’s history.
Chart
(Source: CoinMetrics)
After years of steady growth, options open interest (OI) now sits nearly neck-and-neck with futures OI, marking a meaningful shift in how risk is expressed and transferred across the market. Options are no longer peripheral; they are increasingly central to price discovery and volatility dynamics.
As a result, notional exposure is expected to rebuild steadily throughout the year, with a high likelihood of printing fresh all-time highs into the December 26 expiry.
That rebuilding process has already begun. Year-to-date, options OI notional is up 38.3%, reaching $36.2bn.
Yet the headline growth masks more nuanced dynamics beneath the surface. While notional exposure is expanding, the composition, tenor, and volatility embedded in positioning tell a more cautious story, consistent with a market still recalibrating macro dynamics rather than aggressively seeking convexity.
From relief back to re-hedging
By mid-January, the market value of open interest in Bitcoin call options had materially narrowed the gap it had sustained versus puts for several months, briefly crossing above it. The flip marked a notable shift in sentiment, signaling renewed upside interest in the market’s bellwether asset after a prolonged defensive posture.
From peak to trough, put open interest market value compressed sharply, falling from $2.39bn at the end of November to $766.7mn by 15 Jan. In near symmetry, call open interest bottomed in late November and subsequently rebuilt, rising from $267.6mn to $911.1mn over the same period.
The rebalancing reflected a decisive unwind of downside protection alongside a tentative re-engagement with upside convexity.
Chart
(Source: CoinMetrics)
That inflection, however, proved short-lived. Renewed geopolitical tensions and broader macro uncertainty once again shifted positioning back toward protection. The gap has since widened in favor of puts, with put OI market value rising 34.3% from mid-January to present, while call exposure has retraced toward its earlier lows, effectively returning the market to a more cautious equilibrium.
Open interest market value offers a clearer signal than raw OI volume alone. By capturing the premium actually paid by investors, it reflects the true cost of risk transfer, and, by extension, provides a more reliable read on whether markets are pricing stress, relief, or complacency.
The RV–IV crossover
Implied volatility (IV) across Bitcoin options compressed into historically low levels at the start of the year, marking the quietest regime since late summer.
Realized volatility (RV), however, began to mean-revert higher after spending several weeks trading below implied volatility, a regime typically associated with volatility sellers being rewarded.
Chart
(Source: CoinMetrics)
By mid-January, 7-day realized volatility climbed back above 38%, decisively reclaiming the lead versus short-dated implied volatility, which had failed to adjust upward in time.
The implication is subtle but important: spot began moving more aggressively than options markets were pricing. Rather than expressing volatility through sustained trends, price action increasingly manifested via sharp, macro-driven intraday swings, consistent with a market reacting to exogenous shocks rather than endogenous leverage build-ups.
This misalignment created a window of opportunity for volatility buyers. Following the year-end leverage reset, call buyers selectively stepped back in as implied volatility lagged the pickup in realized moves.
Call crowding meets January expiry
According to CoinGlass data, Bitcoin’s options open interest is heavily skewed toward out-of-the-money call exposure, with a pronounced concentration around the $100,000 strike.
The latter now represents the single largest accumulation of open interest across the options surface, and the imbalance is visible in notional terms as well. Following the December 2025 expiry, the bulk of the downside protection was flushed from the market, leaving overall notional exposure tilted toward calls.
As the January expiry approaches, call positioning is increasingly concentrated along the strike distribution while market value dynamics tell a more nuanced story.
For the March 2026 expiry, a key tenor on the curve, open interest between calls and puts is roughly balanced in contract terms. However, the total premium paid for puts is nearly four times that for calls, reflecting persistent demand for protection even as sophisticated participants accumulate cheap, out-of-the-money calls in a low-volatility environment.
This asymmetry highlights a dual regime: investors seeking convex upside exposure are doing so at minimal cost, while protection buyers are paying up for downside insurance amid renewed macro uncertainty.
With approximately $8.36bn in Bitcoin options set to expire 30 Jan, current positioning suggests a gravitational pull toward the $90,000 level, where option-related flows could temporarily pin the spot price at expiry.
