The latest report from Bybit and Block Scholes highlights the stability of the Bitcoin options market amidst year-end expirations, while Ethereum options are poised for brief volatility.

Bitcoin Options Market Stability

According to the report, open interest in Bitcoin perpetual swaps remained stable throughout the year-end expirations, despite the typical price swings associated with options nearing expiration. Traders appear cautious yet confident in their options’ stability, opting not to rely heavily on perpetual contracts to hedge the delta of expiring options.

As a result, Bitcoin open interest (OI) has remained relatively stable, despite muted volatility and failing to recover to its higher December levels. The total BTC OI currently stands at around $56.6 billion, after plummeting at the start of January 2025.

Bitcoin Futures OI and Implied Volatility

The report notes that Bitcoin futures OI has dropped below the $60 billion threshold. Although it hasn’t fallen as low as early November levels, when it dipped below $40 billion, the implied volatility term structure for BTC options remains steep.

Implied volatility is projected to stay at 57% over a one-week period for options trading five points lower. Most of the expired open interest hasn’t been reinvested yet, resulting in a neutral call-put balance. This indicates that the Bitcoin options market shows limited leverage compared to its position at the beginning of December 2024.

Ethereum Options Market Volatility

In contrast, Ethereum options remained stable through the end of December 2024, but ETH’s spot price is showing lower volatility compared to its short-term implied volatility. Over the past week, the implied volatility term structure for ETH options briefly plunged before flat-lining again.

This pattern suggests that the Ethereum options market is preparing for potential short-term volatility in spot price movements. Despite nearing expiration dates, ETH call options have gained momentum at the start of 2025, with Ethereum OI standing at $25.5 billion, returning to its mid-December levels.

Key factors to consider when analyzing the Bitcoin and Ethereum options markets include:

  • Open interest and its impact on market volatility
  • Implied volatility term structure and its potential effects on spot price movements
  • The relationship between perpetual contracts and expiring options

For more insights and analysis on the cryptocurrency market, visit Global Crypto News for the latest news and updates.

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