Today, over $10 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are due to expire.

Market watchers are particularly attentive to this event due to its potential to influence short-term trends through the volume of contracts and their notional value. Examining the put-to-call ratios and maximum pain points can provide insights into traders’ expectations and possible market directions.

Bitcoin and Ethereum Options Expiring Today

The notional value of today’s expiring BTC options is $9.47 billion. According to Deribit’s data, these 98,309 expiring Bitcoin options have a put-to-call ratio of 0.84. This ratio suggests a prevalence of purchase options (calls) over sales options (puts).

The data also reveals that the maximum pain point for these expiring options is $80,000. In crypto options trading, the maximum pain point is the price at which most contracts expire worthless. Here, the asset will cause the greatest number of holders’ financial losses.

In addition to Bitcoin options, 412,116 Ethereum options contracts are set to expire today. These expiring options have a notional value of $1.47 billion and a put-to-call ratio of 0.75. The maximum pain point is $2,900.

The current market prices for Bitcoin and Ethereum are above their respective maximum pain points. BTC is trading at $96,353 while ETH sits at $3,573. This suggests that if the options were to expire at these levels, it would generally signify losses for options holders.

The outcome for options traders can vary significantly depending on the specific strike prices and positions they hold. To assess potential gains or losses at expiration accurately, traders must consider their entire options position, along with current market conditions.

Insights on Today’s Expiring BTC and ETH Options

Analysts at options trading tool provider Greeks.live reveal an interesting investor outlook that shows comprehensive evaluation is essential before drawing conclusions.

“We got an 11% pullback on BTC and people are saying the end is imminent. It was less than 10 days ago when the same people were asking for a pullback to buy,” they wrote.

Jeff Liang, CEO and co-founder of Greeks.live expresses optimism, saying that he is prepared to hold until the options expire at 8:00 UTC, Friday.

“Although the spread is significant, the offer implied volatility is on par with recent 1-month historical volatility, so it’s not overpriced. A 5% spot price increase can offset the spread. I’m prepared to hold until expiration. I bought a batch of call options last night, and the market has made some moves this morning,” Liang said.

Meanwhile, crypto markets remain subtly optimistic. In a statement shared with BeInCrypto, Bybit said the optimism could be attributed to hopeful investors’ expectation of a more crypto-friendly SEC Chair after Gary Gensler’s resignation.

Against this backdrop, Bybit also commented on the current market outlook, citing a correction in Bitcoin price and that expiring ETH options signal moderated bullish sentiment.

“BTC’s ebbing from the $100,000 mark has flattened the ATM volatility term structure, with short-tenor options dipping below 60%. This mirrors a pattern observed since the US election. Lower realized volatility explains the drop. While open interest in calls and puts remains unchanged, demands for short-term options this week have stagnated. ETH options show slightly more bullish sentiment than BTC options. Markets have recalibrated after the post-election high, but call options remain in the lead in both trading volumes and open interests,” Bybit added.

ATM IV refers to the implied volatility of an option contract whose strike price is equal to the current market price of the underlying asset. Analysts and traders often use this specific type of IV (implied volatility) to gauge market sentiment and volatility expectations for the underlying security.

Traders are therefore advised to remain cautious, as historically, options expiration often leads to short-term instability in the market. The weekend will also be crucial as it is often characterized by high volatility due to low trading volumes.

Ken Sim, the mayor of Vancouver, has proposed exploring Bitcoin as part of the city’s financial strategy. He suggested that a Bitcoin reserve would help the city diversify its financial resources. 

The mayor announced plans to formally introduce a motion for this Bitcoin reserve on Dec. 11. 

More States are Inclining Towards a National Bitcoin Reserve

According to the mayor, Vancouver aims to become a Bitcoin-friendly city. The motion will focus on assessing whether Bitcoin could serve as a hedge against economic instability. 

Sim’s political group, A Better City, previously caught the crypto community’s attention in April 2022 by accepting cryptocurrency donations.

“Vancouver is officially the most Bitcoin-friendly city in North America. Biggest Bitcoin monthly meetups, most BTC merchants per capita, and now, building a Bitcoin reserve,” Canadian crypto entrepreneur Julian Figueroa wrote on X (formerly Twitter).

Meanwhile, Bitcoin adoption at the government level continues to grow. El Salvador led the way in 2021 by making Bitcoin legal tender. According to Trading Economics, the country’s gross domestic product (GDP) rose from approximately $29 billion in 2021 to over $34 billion in 2023.

However, global institutions remain cautious about Bitcoin’s role in national economies. In October, the International Monetary Fund (IMF) called on El Salvador to enhance oversight of Bitcoin transactions.

In the US, conversations around adopting Bitcoin at a federal level are intensifying. Senator Cynthia Lummis has championed the idea of a strategic Bitcoin reserve, proposing legislation to formalize the concept. 

Earlier this month, Lummis proposed that the upcoming government sell a portion of Federal Resreve’s gold to increase its Bitcoin holdings. At the same time, Pennsylvania introduced a bill to allocate 10% of state funds to BTC, aiming to combat inflation and diversify investments.

Most recently, investment management firm VanEck also joined the Bitcoin Reserve campaign. The company is actively endorsing BTC’s adoption as a state or national reserve asset. VanECK’s Bitcoin ETF HODL currently holds a net asset of $1.29 billion. 

Overall, Vancouver’s exploration of Bitcoin aligns with a broader trend of governments and institutions considering the cryptocurrency as part of their financial frameworks.

A well-known gold advocate denounced MicroStrategy’s investment plan to purchase more Bitcoin and build up its crypto reserve.

Peter Schiff, a vocal critic of the firstborn cryptocurrency, also slammed the pro-crypto stance of President-elect Donald Trump, arguing that it is detrimental to the country.

MicroStrategy’s Bitcoin Investment Strategy

MicroStrategy revealed that it has a $42 billion investment strategy to buy more Bitcoin in the next few years.

Analysts said that the American development company is known for purchasing a great deal of cryptocurrency regardless of market fluctuations.

Reports stated that MicroStrategy recently bought 55,500 BTC worth $5.4 billion, allowing the company to strengthen its position in the crypto sector.

As of press time, MicroStrategy owns 386,700 BTC worth over $36 billion, putting the firm among the biggest corporate holders of cryptocurrency.

A Dangerous Bet

Schiff criticized MicroStrategy’s continuous purchase of the digital asset, denouncing the $42 billion investment plan to acquire more Bitcoin within three years.

The Bitcoin critic described MicroStrategy’s BTC investment plan as “a dangerous bet.”

It’s now been four weeks since $MSTR announced its three-year plan to spend $42 billion buying #Bitcoin. MSTR has already spent $10 billion. At this rate, the three-year plan will be completed in about 16 weeks. Once the buying is done, expect both Bitcoin and MSTR to crash.

— Peter Schiff (@PeterSchiff) November 26, 2024

“At this rate, the three-year plan will be completed in about 16 weeks,” Schiff said.

He sees the price hike brought by what is called MicroStrategy’s “bold plan” will be short-term, leading to a considerable decline in BTC price and a drop in the company’s stock price.

Moreover, Schiff believes that the company’s large-scale purchase only brings an artificial price appreciation, noting that it may pose a problem to the firm because it put all its proverbial eggs in one basket which is not a smart concept in any investment.

BTC market cap currently at $1.88 trillion. Chart: TradingView.com

Schiff predicts that MicroStrategy might not be able to fund future purchases of Bitcoin, echoing his view that this move could possibly hurt both the company and its shareholders.

On the other hand, MicroStrategy executive Michael Saylor defended the company’s investment approach, saying that they have no plan of selling their crypto assets in the near future.

Image: ETMarkets.com

Saylor said that the company remains bullish on the future of BTC, urging other companies to draw inspiration from their investment strategy.

Historically, Schiff has been a staunch critic of MicroStrategy’s moves to buy Bitcoin.

Trump’s Pro-Crypto Stance: Detrimental To The Economy?

Schiff also criticized Trump in his plans to implement regulations that are pro-cryptocurrency, arguing that it will weaken the country’s economic standing.

“When the government picks winners and losers, it usually picks losers. Thanks to the Trump administration’s picking bitcoin, Wall Street is winning big by misallocating capital to BTC and related value-destroying businesses,” Schiff stated.

The staunch crypto critic believes that the US would become weaker once it became a Bitcoin superpower.

Meanwhile, crypto advocates dismissed Schiff’s opinions, saying that it is among the dumbest posts ever.

Featured image from FXLeaders, chart from TradingView