Bitcoin investors are gearing up for the year’s largest options expiry, set to take place on Dec. 27 at 8:00 am UTC. With $19.8 billion in options contracts at stake, this event could significantly influence Bitcoin’s price trajectory, as both bullish and bearish traders vie for dominance in the market.
The Numbers Behind the Expiry
The total open interest for Bitcoin options includes $12 billion in call (buy) options and $7.8 billion in put (sell) options. Notably, Deribit dominates the Bitcoin options market with a 72% market share, followed by the Chicago Mercantile Exchange (CME) at 12% and Binance at 9%.
Bitcoin’s recent rally, which saw its price surge 68% over the last three months to cross $100,000, has put bearish traders at a disadvantage. Many put options have lost their value, making bulls better positioned heading into the expiry.
Bulls in the Driver’s Seat
Key Factors Supporting the Bulls:
- Institutional Inflows: Spot Bitcoin ETFs have attracted $4.5 billion in investments during the first two weeks of December, reflecting strong institutional demand.
- MicroStrategy’s Massive BTC Purchase: Between Dec. 2 and Dec. 8, MicroStrategy bought 21,550 BTC at an average price of $98,783 per Bitcoin, reinforcing the bullish sentiment.
- Policy Proposals: Senator Cynthia Lummis has proposed creating a U.S. strategic Bitcoin reserve to accumulate up to 1 million BTC over time. Similarly, Texas lawmakers are considering holding Bitcoin as a reserve asset.
If Bitcoin’s price remains above $100,500 by the Dec. 27 expiry, only $275 million worth of put options will retain value. This favors bullish traders significantly, as calls (buy options) above the $100,000 mark become highly profitable.
Potential Price Scenarios
Below are the five most likely outcomes for the options expiry based on Bitcoin’s current price trends:
- Between $90,000 and $95,000:
- $4.6 billion in calls vs. $1.1 billion in puts
- Calls dominate by $3.6 billion
- Between $95,000 and $100,000:
- $5.6 billion in calls vs. $520 million in puts
- Calls dominate by $5.1 billion
- Between $100,000 and $105,000:
- $7.12 billion in calls vs. $240 million in puts
- Calls dominate by $6.9 billion
- Between $105,000 and $112,000:
- $8.13 billion in calls vs. $120 million in puts
- Calls dominate by $8 billion
These scenarios highlight the advantage held by bullish traders if Bitcoin remains above key levels, particularly $105,000.
What Bears Need to Do
To avoid substantial losses, bears must push Bitcoin’s price below $95,000 before the expiry. Failure to do so could solidify bullish momentum heading into 2026, especially if bulls manage to push BTC above $105,000, setting a new all-time high.
This massive options expiry has the potential to set the tone for Bitcoin’s market activity as 2025 begins. Institutional participation, large-scale purchases, and the possibility of Bitcoin being included in state reserves are fueling optimism among bullish investors. However, bearish traders remain determined to contain the rally, aiming for sub-$95,000 levels to mitigate losses.
