Crypto Options Hit Record $28B Expiry as Bitcoin and Ethereum Face Q4 Pressure

TLDR:

• Record $28B options expiry: December 26 marked history’s largest crypto options settlement event.BTC’s
• Bullish skew persists: 0.35 put-call ratio shows traders favor calls despite price weakness.
• March contracts dominate: Q1 2026 options hold 30% of open interest with OTM calls leading positions.
• Moderate volatility aids sellers: BTC IV at 40% and ETH at 60% create premium collection opportunities.

The cryptocurrency derivatives market witnessed its largest options expiry on December 26, with nearly $28 billion in notional value settling across major digital assets.  

Bitcoin options accounted for $23.6 billion of this total, while Ethereum contributed $3.71 billion. The settlement data reflects a market grappling with four consecutive months of declining prices, though trading activity suggests continued institutional participation through rollover strategies and block trades.

Bitcoin and Ethereum Options Show Bullish Positioning Despite Price Weakness

Market data from Greeks.live shows 267,000 Bitcoin options contracts expired with a put-call ratio of 0.35. 

This ratio indicates stronger demand for call options compared to puts, suggesting traders maintained bullish positioning despite recent price weakness. The maximum pain point settled at $95,000, well above current trading levels.

Ethereum’s expiry involved 1.28 million contracts with a put-call ratio of 0.45 and maximum pain at $3,100. Both assets have traded below key psychological levels, with Bitcoin falling under $90,000 and Ethereum breaking below $3,000. The fourth quarter marked a particularly challenging period for crypto markets.

Open interest distribution data reveals that 541,500 contracts expired on December 26, with calls representing 66% of the total. Following this settlement, March 2026 quarterly options now hold the largest open interest, comprising over 30% of total positions. 

These contracts consist primarily of out-of-the-money call options, indicating traders are positioning for potential price recovery in the first quarter.

Implied Volatility Levels and Trading Patterns Signal Market Conditions

Implied volatility metrics provide insight into current market expectations and risk pricing. Bitcoin’s main tenor implied volatility averaged approximately 40%, while Ethereum’s stood at 60%. 

Both readings fall within moderate ranges compared to historical levels throughout the year. Multiple factors influenced these volatility readings, including reduced price fluctuations and the Christmas holiday period.

Block trade activity increased notably in both volume and proportion ahead of the settlement date. This pattern typically reflects rollover demand as institutional participants reposition their hedges and speculative positions. 

The elevated block trade activity continued through the settlement process, suggesting sustained institutional engagement despite broader market headwinds.

The current market environment appears favorable for option sellers based on prevailing conditions. Moderate volatility levels combined with subdued price action create opportunities for premium collection strategies. 

However, market sentiment remains cautious following four consecutive monthly declines in both major cryptocurrencies. Post-settlement positioning toward March quarterly options suggests participants anticipate potential market stabilization in early 2026.

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