$28B Crypto Time Bomb Explodes: Record Bitcoin and Ethereum Options Expiry Shakes the Market
Record $28 Billion Crypto Options Expiry Tests Market Stability as Rollovers Dominate Trading
December 26 marked the largest cryptocurrency options expiry ever recorded, with nearly $28 billion worth of Bitcoin and Ethereum contracts settling in a single session. The scale of the event made it a critical moment for digital asset derivatives markets, even as spot prices for major cryptocurrencies remained under pressure.
According to data shared by Greeks.live, more than half of total open interest across crypto options markets expired on that day. The concentration of contracts led to elevated trading activity, with rollover transactions dominating flows as traders repositioned ahead of settlement.
Despite the magnitude of the expiry, price action in spot markets remained relatively muted, underscoring how derivatives positioning, rather than immediate directional conviction, shaped market behavior.
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| Source: XPost |
Bitcoin Options Account for the Majority of Expiring Contracts
Bitcoin made up the largest share of the record expiry. Approximately 267,000 Bitcoin options contracts reached settlement, representing a notional value of roughly $23.6 billion. The put-to-call ratio stood at 0.35, indicating that bullish call positions significantly outweighed bearish puts.
Options data showed the maximum pain level for Bitcoin near $95,000, a theoretical price point at which the greatest number of options would expire worthless. However, Bitcoin traded well below that level heading into settlement, reflecting sustained weakness that had defined much of the fourth quarter.
During the final months of the year, Bitcoin slipped below $90,000 and struggled to regain momentum, only showing signs of stabilization toward late December. According to Greeks.live, large clusters of open interest formed around specific strike prices. Put options were heavily concentrated near the $85,000 level, while call interest was strongest around $100,000.
This distribution effectively created a narrow corridor for price movement, with opposing positions limiting volatility as expiry approached. Analysts note that such positioning often dampens spot market swings, as hedging activity offsets directional pressure.
Ethereum Options See Heavy Volume at a Smaller Scale
Ethereum also experienced a significant options expiry, though the overall notional value was smaller than Bitcoin’s. Roughly 1.28 million Ethereum options contracts expired, accounting for an estimated $3.7 billion in notional value.
The put-to-call ratio for Ethereum stood at 0.45, suggesting a more balanced distribution between bullish and bearish positions compared with Bitcoin. The max pain level for ETH options was near $3,100, yet Ethereum traded below $3,000 for much of the period leading up to expiry.
Ethereum, like Bitcoin, posted four consecutive monthly declines, reflecting broader weakness across the crypto market. Reduced risk appetite, lower trading volumes, and macroeconomic uncertainty all contributed to subdued sentiment.
Implied volatility metrics provided additional context. Bitcoin’s main-tenor implied volatility hovered near 40%, while Ethereum’s was closer to 60%. Both figures sat near the midpoint of their respective ranges for the year, shaped by reduced price swings and the seasonal slowdown typical of late December trading.
Rollover Activity Dominates Trading Flows
One of the defining features of the December 26 expiry was the dominance of rollover trades. Rather than allowing positions to expire outright, many institutional traders shifted exposure into future-dated contracts, particularly the March quarterly options.
This behavior significantly increased trading volumes while adding noise to short-term indicators. Greeks.live noted that rollover-driven flows often distort commonly tracked signals, making it difficult to infer genuine market direction in the days surrounding major expiries.
By rolling positions early, institutions aimed to reduce the risk of sharp price moves on settlement day. While this strategy helps manage exposure, it can also obscure underlying sentiment, as trading activity reflects risk management rather than fresh conviction.
Post-Expiry Focus Shifts to March Contracts
Following the record settlement, attention quickly moved to the March quarterly options, which now account for more than 30% of total open interest across crypto derivatives markets. A significant portion of that exposure is concentrated in out-of-the-money call options.
This positioning suggests that traders are cautiously positioning for a potential rebound in early 2026 rather than bracing for immediate downside. However, analysts warn against interpreting this as a definitive bullish signal.
Options markets often reflect a range of hedging and speculative strategies, and heavy call open interest can coexist with weak spot prices for extended periods.
A Difficult Quarter for Crypto Markets
The fourth quarter proved challenging for the crypto sector as a whole. Prices across major assets trended lower, development activity slowed, and investor sentiment remained fragile. In this environment, options sellers generally benefited more than directional traders, as subdued volatility favored premium collection strategies.
The record expiry highlighted how deeply derivatives markets are now embedded in crypto trading dynamics. While options provide valuable tools for risk management and price discovery, they can also suppress volatility during periods of heavy positioning.
Market participants will be watching closely to see whether the clearing of expiring contracts reduces structural pressure on prices in the weeks ahead.
What Comes Next for Crypto Derivatives
With the largest expiry on record now behind the market, analysts are assessing whether spot prices will regain clearer direction in early 2026. Reduced options-related hedging could allow underlying fundamentals and macroeconomic factors to exert greater influence.
Still, caution remains widespread. Liquidity conditions, regulatory developments, and broader risk sentiment will likely play a significant role in shaping the next phase of market activity.
For now, the December 26 expiry stands as a milestone for crypto derivatives, underscoring both the growing sophistication of the market and the challenges of interpreting price signals in an environment dominated by complex positioning.
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Writer @Ethan
Ethan Collins is a passionate crypto journalist and blockchain enthusiast, always on the hunt for the latest trends shaking up the digital finance world. With a knack for turning complex blockchain developments into engaging, easy-to-understand stories, he keeps readers ahead of the curve in the fast-paced crypto universe. Whether it’s Bitcoin, Ethereum, or emerging altcoins, Ethan dives deep into the markets to uncover insights, rumors, and opportunities that matter to crypto fans everywhere.
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