Historic BTC Options Expiry Reshaped Market Dynamics: What Happened When $14B Worth Settled

A massive BTC options expiry event fundamentally altered market structure recently, leaving traders and analysts grappling with the aftermath of one of the largest derivative settlements in crypto history. When the dust settled on that record-breaking BTC options expiry, the crypto market felt the reverberations across multiple timeframes and asset classes. The scale was unprecedented: 146,000 bitcoin options contracts valued at approximately $14 billion—representing 44% of all open interest on Deribit at that moment—expired simultaneously, marking the exchange’s largest single expiration event ever recorded.

The magnitude of this BTC options expiry demonstrated just how concentrated leverage had become in the derivatives market heading into the new year. Deribit, which accounts for over 80% of global crypto options trading, became the epicenter of this historic market event. Alongside the bitcoin settlement, another $3.84 billion in Ethereum options also expired, but the narrative around that event proved distinctly different from its larger counterpart.

When Billions Expired In-The-Money: The Settlement Reality

As the BTC options expiry unfolded, approximately $4 billion worth of bitcoin contracts—roughly 28% of total open interest—settled in-the-money, generating realized profits for buyers holding those positions. This substantial amount of profitable contract settlement created a critical decision point for traders: either square off their positions entirely or roll them into subsequent expiry dates.

“I suspect a fair bit of open interest in BTC and ETH will be rolled into Jan. 31 and Mar. 28 expiries as the nearest liquidity anchors at the start of the new year,” noted Simranjeet Singh, portfolio manager at GSR, highlighting how traders were distributing their risk across multiple timeframes rather than consolidating into a single exit.

The put-call open interest ratio for that BTC options expiry stood at 0.69, revealing an asymmetric market structure where calls outnumbered puts—seven puts for every ten calls. This call-heavy skew indicated that leverage positioning favored upside bets, a critical detail given what had transpired in spot markets beforehand. Bitcoin had fallen over 10% to $95,000 following the Federal Reserve’s December decision to halt cryptocurrency purchases and signal fewer rate cuts ahead. Traders holding leveraged bullish positions suddenly found themselves underwater, facing magnified losses on their margin bets.

“The previously dominant bullish momentum has stalled, leaving the market highly leveraged to the upside. This positioning increases the risk of a rapid snowball effect if a significant downside move occurs,” Deribit Chief Executive Officer Luuk Strijers explained to analysts, underscoring the fragility embedded in market structure at that moment.

Volatility of Volatility Signals Market Confusion

Beyond the raw numbers, market-derived metrics painted a picture of pervasive directional uncertainty as the BTC options expiry approached. The volatility of volatility—a measure of how much an asset’s volatility itself fluctuates—spiked noticeably, suggesting traders faced genuine confusion about which way prices would break.

“The much-anticipated annual expiry is poised to conclude a remarkable year for the bulls. However, directional uncertainty lingers, highlighted by heightened volatility of volatility,” Strijers noted. When volatility of volatility rises sharply, it typically signals heightened sensitivity to news flow and economic data releases. Traders face pressure to aggressively adjust positions and implement hedging strategies, often leading to whipsaw price movements and rapid reversals.

This lack of clarity represented a stark contrast to the confident bullish positioning that had dominated markets throughout most of 2025. The psychology had shifted meaningfully as this BTC options expiry drew closer—excitement morphed into anxiety.

Ethereum Showed Weaker Technicals Than Bitcoin

While bitcoin dominated headlines due to its sheer size, the derivatives market revealed a more bearish technical backdrop for Ethereum during that same expiry window. Comparing volatility smile curves—graphical representations of implied volatility across different strike prices—researchers at Block Scholes noted a telling divergence: BTC’s volatility smile remained relatively stable, but ETH’s implied volatility for call options dropped significantly.

This decline in call demand for Ethereum pointed toward diminished appetite for bullish bets on the world’s largest altcoin. “After more than a week of poorer spot performance, ETH’s put-call skew ratio is more strongly bearish (2.06% in favour of puts compared to a more neutral 1.64% towards calls for BTC),” explained Andrew Melville, research analyst at Block Scholes. The put-call skew measures how much more investors will pay for puts offering downside protection versus calls offering upside exposure.

“Overall, end-of-year positioning reflects a moderately less bullish picture than we saw going into December, but even more starkly for ETH than BTC,” Melville added, indicating that options market participants had grown noticeably more cautious specifically about Ethereum’s near-term price trajectory.

Current Market Response to the Settlement

In the weeks following that historic BTC options expiry, bitcoin has recovered to $68,640, gaining 5.04% over the past 24 hours as of late February 2026, suggesting some stabilization after the initial post-expiry volatility. Ethereum has climbed to $2,060, up 8.42% in the same timeframe, indicating altcoins have participated in recent strength alongside bitcoin.

However, market observers remain watchful about whether this recovery represents durable structural improvement or merely a technical bounce driven by thin liquidity and position squeezing. Key resistance levels around $72,000 and $78,000 for bitcoin remain critical tests for confirming a more sustainable uptrend, while traders continue monitoring whether fresh capital inflows or merely rotational flows among existing positions are driving the recent advance.

The BTC options expiry that shook markets at year-end exposed the risks inherent in an overleveraged derivatives market, reminding participants that massive notional amounts concentrated in single expiry events can amplify volatility regardless of broader directional sentiment.