Over $2.2 Billion in Bitcoin and Ethereum Options Expire as 2026 Begins

Core Insights - The first major derivatives settlement of 2026 involves over $2.2 billion in Bitcoin and Ethereum options, with Bitcoin contracts dominating the notional value at approximately $1.87 billion [2][7] - The settlement is occurring as Bitcoin trades near $88,972, just above the max pain level of $88,000, which is significant for traders monitoring potential volatility [2][7] Open Interest and Market Positioning - Open interest data indicates a bullish market sentiment, with 14,194 call contracts against 6,806 puts, resulting in a put-to-call ratio of 0.48, suggesting traders are positioning for higher prices [3] - Overall open interest remains high, with 80,957 calls versus 49,998 puts, leading to a put-to-call ratio of 0.62, reinforcing the bullish outlook [4] Ethereum Options and Market Sentiment - Ethereum's options structure reflects cautious optimism, with traders showing less aggressive positioning compared to Bitcoin, indicating a preference for potential upside rather than defensive strategies [5] - The settlement period is critical as it may concentrate price action around max pain levels, benefiting option sellers if prices gravitate toward these strikes [6][5] Implications for Market Volatility - The timing of this settlement is crucial as it may set the tone for market volatility in the upcoming quarter, with historical data suggesting that major options events can act as volatility unlocks [7] - Positioning data shows that Bitcoin block trades are skewed towards calls at 36.4% of volume, while Ethereum's block trade activity is even more pronounced with calls at 73.7%, indicating a strategic long-term positioning [8] Future Outlook - There is sustained interest in Bitcoin options concentrated in later 2026 maturities, particularly for March and June, while Ethereum shows consistent interest across quarterly tenors throughout the year, suggesting a positive outlook for both assets [9]