Around $27 billion in Bitcoin and Ethereum options expired on Friday, December 27—the largest single expiration event of 2025. The massive quarterly expiry on Deribit, the world's leading crypto options exchange, could influence price action as year-end trading concludes. Bitcoin traded near $87,000 while Ethereum hovered around $3,400 heading into the event.

The Expiry Details

Friday's options expiration breakdown:

  • Bitcoin options value: ~$14 billion (approximately 160,000 BTC)
  • Ethereum options value: ~$13 billion
  • Total: ~$27 billion
  • Exchange: Primarily Deribit (80%+ of crypto options volume)
  • Settlement time: 8:00 AM UTC Friday

How Options Expiry Affects Markets

Options expiration creates several market dynamics:

Max pain theory: The "max pain" price is where the most options expire worthless, minimizing payouts to option buyers. For this expiry:

  • Bitcoin max pain: ~$96,000
  • Ethereum max pain: ~$3,600

Both cryptocurrencies traded below their max pain levels, suggesting call option holders face losses while put holders see gains.

Delta hedging unwind: Market makers who sold options must hedge their exposure by buying or selling the underlying asset. As options expire, these hedges are unwound, potentially creating price moves.

Volatility reset: After expiration, implied volatility often drops as near-term uncertainty is resolved.

Market Context

The options expiry arrives during a challenging period for crypto:

  • Bitcoin: Down approximately 9% in December; struggling below $90,000
  • Fear & Greed Index: 27 ("Fear" territory)
  • ETF flows: Outflows exceeding $230 million in recent days
  • Selling pressure: Highest in three years according to on-chain data

Put/Call Ratios Signal Sentiment

The structure of expiring options reveals market positioning:

  • Bitcoin put/call ratio: 0.38 (more calls than puts = bullish positioning)
  • Ethereum put/call ratio: 0.42
  • Interpretation: Despite recent price weakness, traders remain positioned for upside

The bullish positioning means many call options expired worthless with Bitcoin well below the $96,000 max pain level—a painful outcome for optimistic traders.

Historical Patterns

Past large expirations offer context:

After major expirations, Bitcoin has historically:

  • Experienced reduced volatility for 24-48 hours
  • Often established a new trading range
  • Seen increased directional moves once new positions are established

The December expiry is particularly significant as it represents year-end positioning, with many traders closing books before 2026.

What Happens Next

Post-expiry dynamics to watch:

January positioning: Traders will establish new options positions for Q1 2026, potentially setting up the next major move.

Spot market influence: With options pressure removed, spot supply and demand become the primary price drivers.

Volatility potential: Thin holiday liquidity combined with the expiry reset could create outsized moves.

Institutional Activity

Despite retail fear, institutional players remain active:

Vanguard's entry: The $11 trillion asset manager recently allowed 50 million customers to purchase Bitcoin ETFs.

Corporate treasuries: GameStop ($519M), Strategy/MicroStrategy (671,268 BTC), and others continue accumulating.

ETF absorption: ETFs, corporate treasuries, and sovereign funds absorbed more Bitcoin than was mined in 2025.

Technical Levels

Key prices to watch post-expiry:

  • Bitcoin support: $85,000 (recent lows)
  • Bitcoin resistance: $92,000-95,000 (prior consolidation zone)
  • Ethereum support: $3,200
  • Ethereum resistance: $3,800

2026 Outlook

Looking ahead, several factors could influence crypto:

Bullish catalysts:

  • Continued institutional adoption
  • Potential Fed rate cuts
  • Bitcoin halving supply impact (occurred April 2024)
  • Regulatory clarity under new administration

Bearish risks:

  • Extended "risk-off" sentiment
  • Regulatory crackdowns
  • Further ETF outflows
  • Macro economic weakness

The Bottom Line

The $27 billion Bitcoin and Ethereum options expiry marks a significant reset for crypto markets heading into 2026. With Bitcoin below the $96,000 max pain level and sentiment in "fear" territory, many bullish option bets expired worthless. However, institutional accumulation continues beneath the surface, and the removal of options-related pressure could allow spot market fundamentals to reassert themselves. For crypto investors, the post-expiry period often brings clarity on near-term direction. The coming days will reveal whether the current weakness represents year-end noise or a more significant trend change.