Traders who piled into bearish bets on Bitcoin’s price are winning a payday amid a shock plunge that dragged the top cryptocurrency to its lowest price since the start of the year.
The value of options contracts that pay off during price declines, or puts, that expire at the end of March rose to $264 million on crypto options exchange Deribit.
Those contracts represent some $2.8 billion worth of Bitcoin.
Calls — or bullish bets — are valued at less than half that figure, just $114 million.
The mismatch shows that while the market overall is positioned bullish — those calls represent a whopping $6.2 billion in Bitcoin — it’s the contrarian Bitcoin traders who are profiting.
Bitcoin’s sudden plunge to $78,445, a 27% tumble from January’s record $108,786, has thrown thousands of puts into profit.
Those that pay out if Bitcoin’s price trades below $95,000 on March 28 are currently the most profitable.
Bitcoin’s fall comes as President Donald Trump’s threat of tariffs drives inflation fears. Other factors are at play, too, including US consumer confidence, tech industry jitters, Federal Reserve policy, and hedge fund positioning.
“I do not think the selloff is over yet,” Geoffrey Kendrick, global head of digital assets at UK bank Standard Chartered, said in a note on Wednesday. “The big capitulation is yet to come.”
$9 billion expiry
On Friday, options on Deribit representing $4.9 billion worth of Bitcoin expired.
Yet next month is set to be the biggest options event of the year, where puts and calls representing $9 billion worth of Bitcoin will expire.
The so-called max pain price for Bitcoin options expiring on March 28 is currently $85,000. Traders tend to take that price as a sign that prices could rebound over the coming month.
The term max pain comes from maximum pain theory, which posits that the price of an underlying asset will gravitate to the price where the largest number of options contracts will expire worthless.
Currently, calls that pay out if Bitcoin rises above $100,000 are the most traded options for the March 28 expiry.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com. creator solana token
