Bitcoin options are not limiting BTC price

Takeaways from the conference:

• The popularity of covered calls increased as the cash-and carry returns plummeted, but statistics show that they do not suppress Bitcoin’s value structurally.

• Put demand is increasing and put ratios are stable, suggesting that yield and hedging strategies can exist alongside bullish positions.

Bitcoins (BTC( price) entered a downward trend in November. Traders began to form theories as to why corporate accumulation and institutional inflows failed at maintaining price levels over $110,000.

The demand for Bitcoin Options, especially those tied to BlackRock iShares Spot Bitcoin (IBIT), exchange traded fund is often cited as an explanation.

In December 2025, the aggregate Bitcoin open interest increased to $49 billion from $39 in December 2024. This raises questions about covered calls.

The critics claim that by “renting out” In exchange for their potential upside, big investors unintentionally set a limit that will prevent Bitcoin from reaching its next level. parabolic phase. For this argument to make sense, it is helpful to think of a covered-call as a compromise between steady income and price appreciation.

A covered call is a strategy where an investor, who owns Bitcoin already, sells the option (buy call) to a third party. The buyer has the option to buy Bitcoins at a set price (such as $100,000) by a certain date. The seller is paid upfront, much like earning interest on an investment bond.

This strategy is different from products that offer fixed income because it allows the seller to continue holding a volatile asset even though they are limited in their upside potential. The seller will miss out on any additional gains if Bitcoin surges up to $120,000.

Trading analysts argue that professional dealers, who have purchased these options and are selling Bitcoin to cover their risks on the spot markets create a constant “sell wallPrices for popular strikes are ” displayed around them.

The collapsed Cash and Carry trade was replaced with options-based returns

It is clear that the shift to options-based returns was a response to the crash of the cash and carry Trading BTC futures and holding the equivalent spot position. 

In the latter part of 2024, traders enjoyed a 10%- 15% premium. However, by February 2025 this premium had dropped below 10%. By November, the premium barely managed to stay above 5%.

Covered calls were chosen by investors in pursuit of higher yields. They offered annualized returns of 12 to 18%. In IBIT, open interest increased from $12 billion to $40 billion at the end of 2024. In spite of this, the ratio between put and call has been stable at below 60%.

If widespread “suppressive” This ratio is likely to have crashed if call selling was truly dominant, as the call seller market would become saturated. The balance suggests that, for each seller who is yield focused, there are still buyers positioning themselves for an eventual breakout.

Put-to-call suggests that, while some participants sell call options with an upside potential, a larger group purchases put instruments (sell) as protection from a possible price drop.

In the latest defensive position, skew measures are reflected. IBIT puts were trading at a 2 % discount late in 2024. They now trade at 5 % premium. In the meantime, implied volatility (the market’s gauge of anticipated turbulence) has declined from late 2024 to May, from 57%.

The lower volatility, the less premiums sellers earn. This reduces their incentive to use this so-called “suppressive” Even though the total amount of interest has risen, strategy has actually decreased.

It makes no sense to argue that covered calls keep prices low when those who own the call options will benefit from higher prices. Instead of acting as an obstacle, the option market has been the most important venue to determine prices. Bitcoin’s volatility The yield is monetized.

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