The Bitcoin (BTC) market is gearing up for the $11.8 billion options expiration at the end of the year, which will take place at 3 p.m. ET on December 27. Recent data shows a strong dominance of call options, although bears could significantly reduce losses if Bitcoin can keep the price below $75,000.
Total Open Interest in Bitcoin Options for December 27
Currently, the total open interest in call options is $7.9 billion, while put options are just $3.92 billion – fueled by Bitcoin’s 29% rally since October, potentially rendering most put options worthless.
Deribit, the leading provider in the options market, holds an overwhelming market share of 74%, followed by the Chicago Mercantile Exchange (CME) and Binance, each with 10.3%, more than double OKX's 4.3% market share.
Both bulls and bears have an incentive to influence Bitcoin's spot price, and as expiration approaches, potential outcomes will depend on the imbalance of options at various strike prices.
Bitcoin Options Expiration in December Could Trigger a Bull Run
President-elect Donald Trump’s recent victory has clearly boosted investor confidence, especially as he pledged to fire U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler on “day one” and an unprecedented number of pro-crypto lawmakers were elected to the U.S. House of Representatives and Senate.
A pro-Bitcoin mining president could reduce regulatory hurdles, promoting the possibility of approving a “strategic Bitcoin reserve” and directing law enforcement agencies to retain, rather than liquidate, BTC seized from criminal activities. Senator Cynthia Lummis’s bill aims to accumulate up to 1 million Bitcoins over time.
For the December options expiry, open interest totaled $11.8 billion, although the recent surge above $80,000 caught short sellers off guard, reducing the final amount.
If Bitcoin price remains near $88,000 at 3 p.m. ET on December 27, only $96 million in put options will be in play. This limited exposure occurs because a put option at $85,000 will become worthless if BTC trades above that level by expiration.
Bears target below $75,000 to minimize losses
Below are five possible scenarios based on current price trends. The imbalances on each side represent theoretical returns. These estimates do not take into account complex strategies, nor is there a simple way to measure their impact.
Between $72,000 and $75,000: $1.4 billion in call options versus $470 million in put options, net result favoring the call options by $930 million.
Between $75,000 and $80,000: $1.85 billion in calls vs. $270 million in puts, favoring calls with $1.58 billion.
Between $80,000 and $85,000: $2.74 billion in calls vs. $130 million in puts, favoring the calls with $2.61 billion.
Between $85,000 and $90,000: $3.38 billion in calls vs. $96 million in puts, favoring the calls with $3.28 billion.
Between $90,000 and $100,000: $4.52 billion in calls vs. $74 million in puts, favoring calls with $4.45 billion.
To avoid a major loss at the year-end expiry, bears need to push prices lower, targeting around $74,500. Bulls, on the other hand, can maximize profits by pushing BTC to $90,500 by December 27. Overall, current options market data suggests sustained bullish momentum for Bitcoin into early 2025.
