Bitcoin and Ethereum Brace for Record $27 Billion Options Expiry on Boxing Day
Crypto markets are preparing for a monumental event today, December 26, as over $27 billion in Bitcoin and Ethereum options are set to expire on Deribit. This figure represents more than half of the total open interest on the derivatives exchange, marking this day as potentially pivotal in the history of the crypto space.
A Colossal Expiry: Context and Scale
Today’s expiry is markedly higher than those witnessed in previous weeks, largely due to it being the final Friday of both the month and the year. Specifically, the options expiring today encompass contracts for both the month and the fourth quarter of 2025. The sheer scale of these numbers is staggering: Bitcoin options account for approximately $23.6 billion, while Ethereum options contribute around $3.8 billion. Current Bitcoin prices hover around $88,596, with Ethereum trading at $2,956.
Dominance of Call Options
In the landscape of this expiry, call options are evidently dominating, exceeding put options nearly three to one. This development hints at a distinctly bullish sentiment among traders. The so-called "max pain" levels—which represent the price points at which options sellers can maximize their profits while buyers suffer the most significant losses—sit at around $95,000 for Bitcoin and $3,000 for Ethereum.
The Biggest Expiry on Record
According to Deribit, this expiry stands out for being the largest on record, involving more than 50% of the exchange’s total open interest. This has prompted analysts to propose a critical inquiry into market response: “Post-expiry flows will matter more than price. Watch positioning. How would the market react to an expiry this big?”
The theory of "max pain" suggests that spot prices often pull back towards these levels as traders adjust their hedges in the run-up to expiry. Beneath the surface, rollover activity has emerged as a dominant influence in the trading market. Many institutions are choosing to shift positions to January contracts to mitigate risks, resulting in elevated levels of “signal noise” within short-term options data.
Distinguishing Sentiment: Puts vs. Calls
Despite puts making up about 30% of recent block trades, this should not necessarily be interpreted as a bearish sentiment. Market analysts suggest that traders picking up leftover positions abandoned by institutions could find advantageous pricing in this environment.
Calm Before the Expiry Storm
Interestingly, despite the enormity of this expiry, the market appears relatively tranquil. Bitcoin’s implied 30-day volatility index (DVOL) currently hovers around 42%, down from 63% just a month prior. This drop in volatility indicates that panic-driven price swings are less likely, suggesting a more orderly settlement than previously feared.
Key Strike Levels to Watch
Traders are closely monitoring key strike levels as the expiry looms. For Bitcoin, call options ranging from $100,000 to $116,000 are particularly prominent, while the $85,000 put remains the most favored bet on the downside. Ethereum displays a similar pattern, with a concentration of call interest just above the $3,000 mark.
Managing Positions: Institutions at Play
The strategies institutions employ in managing their leftover or rolled-over positions are likely to shape price movements in early 2026. Investors should be aware that large expiries typically lead to volatility as traders scramble to close their trades or roll over positions. The choice to allow December put open interest to expire or extend them will play a critical role in determining whether any downside risk is merely seasonal or indicative of a deeper structural reset.
A Defining Moment for the Crypto Market
With the unprecedented magnitude of this expiry, Bitcoin and Ethereum stand on the cusp of a potentially defining moment in the crypto landscape. Today’s events encapsulate a remarkable convergence of scale, positioning, and seasonal liquidity—factors that may significantly influence trends as the crypto world enters 2026. In this climate, opportunity and risk are inextricably linked, as traders navigate this exceptional crossroads.
