The latest report from Bybit and Block Scholes reveals that the bitcoin options market remained stable ahead of year-end expirations, while ethereum options are set for brief volatility.
According to a <a target="_blank" href="https://learn.bybit.com/crypto-insight/bybit-x-block-scholes-crypto-derivatives-analytics-report-jan-2-2025/” target=”_blank” rel=”nofollow”>report Posted by crypto exchange Bybit and analytics platform Block Scholes, open interest in bitcoin (btc) perpetual swaps remained stable during year-end expirations. This stability was a surprise, as options approaching their expiration date often cause price swings.
The report suggests that traders are cautious but confident enough in the stability of their options not to rely too heavily on perpetual contracts to hedge the delta of expiring options. As a result, bitcoin OI has remained relatively stable, despite moderate volatility and failing to recover to its December highs.
As crypto.news previously reported, bitcoin OI futures have fallen below the $60 billion threshold. btc's total OI currently stands at around $56.6 billion, after plummeting in early January 2025. However, it has not fallen as low as the levels in early November, when it fell below the 40 billion dollars.
The report notes that the implied volatility term structure for btc options remains steep, with implied volatility expected to remain at 57% over a one-week period for options trading five points lower.
Most of the expired open interest has not yet been reinvested, resulting in a neutral buying and selling balance. This indicates that the btc options market shows limited leverage compared to its position at the beginning of December 2024.
Similarly, ethereum (eth) options remained stable until the end of December 2024. However, the eth spot price shows lower volatility compared to its short-term implied volatility.
Over the past week, the implied volatility term structure for eth options dipped briefly before stabilizing again. In contrast to btc's steady decline, eth's pattern suggests that its options market is preparing for potential short-term volatility in spot price movements.
Even as expiration dates approach, eth call options have gained momentum in early 2025. At the time of writing, ethereum OI stands at $25.5 billion, returning to its mid-December levels .
