Bitcoin‘s Big Moment: $13.8 Billion in Options Expire on May 30
The crypto world is holding its breath as May 30 approaches. It’s the date of Bitcoin‘s largest monthly options expiry of 2025, with a whopping $13.8 billion in open interest riding on the outcome. This massive event presents a golden opportunity for bullish investors, but bears might be caught in the crossfire.
The Battle for $110,000
Bitcoin bulls have set their sights high, aiming to push BTC above $110,000 by the expiry date. This would trigger a cascade of profits for those holding call options, contracts that pay out when the price of Bitcoin rises. Conversely, bears holding put options, which profit when the price falls, are facing significant losses.
Data shows that the open interest in Bitcoin put options stands at $6.5 billion, but the majority (95%) of these positions are set below $109,000. This means that if Bitcoin holds near current levels, most of these put options will expire worthless. In contrast, the open interest in call options up to $109,000 totals $3.8 billion, suggesting a potential for significant gains for bulls if the price climbs.
A Strong Hand for Bulls: ETF Inflows and Option Strategies
The tide seems to be turning in favor of the bulls. A recent surge in inflows into US spot Bitcoin ETFs, totaling $1.9 billion between May 20 and May 22, demonstrates robust demand for Bitcoin above $105,000.
Moreover, traders are employing bullish option strategies, such as “bull call spreads”, which provide upside exposure while limiting downside risk. This indicates a strong belief in Bitcoin‘s potential for upward movement.
The Bears‘ Dilemma
Bears aren’t without their strategies. They may attempt to manipulate Bitcoin futures markets to limit their losses as the expiry date nears. However, this could backfire if Bitcoin rallies above $110,000, forcing them to cover their short positions.
The bears‘ ultimate hope lies in a weakening macroeconomic environment, which could heighten risk aversion and dampen demand for Bitcoin. However, recent market trends seem to be pointing in a different direction.
Four Possible Scenarios
The upcoming options expiry presents four possible scenarios, all depending on Bitcoin‘s price action leading up to May 30. These scenarios are based on open interest imbalances and don’t account for complex trading strategies.
- **Between $102k and $105k:** A net gain of $1.85 billion favoring call instruments.
- **Between $105k and $107k:** A net gain of $2.65 billion favoring call instruments.
- **Between $107k and $110k:** A net gain of $3.35 billion favoring call instruments.
- **Between $110k and $114k:** A net gain of $4.7 billion favoring call instruments.
The bulls have a clear advantage in these scenarios, especially if Bitcoin breaks above $110,000. This could potentially trigger a new all-time high and solidify Bitcoin‘s bullish momentum. However, it’s important to remember that the market is inherently volatile, and unexpected events can always occur.
