bitcoin ETF holders and corporate treasuries — the players everyone praises for their long-term vision — are stockpiling insurance against the price crash below $60,000, cryptocurrency exchange Deribit told CoinDesk.
“ETF holders and corporate treasuries are buying 6-month and 1-year puts for $60,000 or less ($60,000 put, a derivatives contract that offers protection against a possible price drop below that level) as portfolio insurance,” Jean-David Péquignot, chief commercial officer at derivatives exchange Deribit.
This put option works like insurance: it allows buyers to sell bitcoin at $60,000 even if the price falls, protecting ETF investors and corporate treasuries with BTC from larger losses while maintaining their long-term reserves.
Péquignot was responding to questions about the growing interest in the $60,000 put option. At the time of writing, those contracts had $1.5 billion in open interest, the highest of all Deribit strikes and maturities. On the exchange, one contract represents one BTC. The platform accounts for almost 80% of global crypto options activity.
The surge in interest in $60,000 put options expiring in six months or more signals deep fears that any price rebound could quickly fizzle out, paving the way for a steeper decline.
What makes this hedge even more notable is that ETF holders and corporate treasuries own a significant supply of bitcoins.
In recent years, investors have poured billions into spot bitcoin ETFs listed in the United States and similar products around the world. US funds alone have seen inflows of 1.26 million BTC, roughly 6% of the total circulating supply of bitcoin. Meanwhile, publicly traded companies hold around 1.14 million BTC, or 5.7% of the BTC supply.
Bitcoin has been trading choppyly below $70,000, after hitting lows near $60,000 earlier this month, CoinDesk data shows. The cryptocurrency has gained almost 5% since Wednesday to trade near $67,500, but the options market remains unimpressed, with puts continuing to trade at a significant premium to calls or bullish bets.
“Although the spot price rose, the 25 delta risk reversal remains stubborn. 30-day puts are still trading at a ~7% volatility premium over calls, indicating that smart money is still paying for downside protection rather than chasing the pump,” Péquignot said.
He added that volatility may increase as prices fall below $63,000. This is because traders and market makers who create liquidity in the order book have a “short gamma” of $60,000 or less.
This means that as prices approach $60,000, these entities may sell more to rebalance their overall exposure to neutral, inadvertently increasing downside volatility.
