May 31, 2024 marked a collision of forces in the cryptocurrency market, with billions of dollars in Bitcoin and Ethereum options expiring on the same day that the industry continued to digest the SEC’s landmark approval of spot Ethereum ETFs just one week earlier. The convergence of these events created a tense atmosphere for traders navigating both the promise of institutional adoption and the reality of near-term market consolidation.
TL;DR
- 69,000 BTC options expired on May 31 with a put/call ratio of 0.37, signaling bullish sentiment
- 92,000 ETH options also expired amid heightened volatility following the Ethereum ETF approval
- Bitcoin’s max pain price was $66,000, with BTC trading near $67,491 at expiry
- The SEC approved 19b-4 filings for eight spot Ethereum ETFs on May 23, though S-1 registration remains pending
- Ethereum surged from below $3,000 to nearly $3,900 on ETF approval news before settling near $3,760
Massive Options Expiry Sets the Tone
The monthly options expiry on May 31 saw 69,000 Bitcoin options contracts settle with a notable put/call ratio of just 0.37 — a figure that reflects overwhelmingly bullish positioning among derivatives traders. The max pain point, the price at which the most options contracts expire worthless, was calculated at $66,000 per Bitcoin.
With Bitcoin trading around $67,491 at the time of expiry according to CoinMarketCap data, the price sat comfortably above the max pain level, suggesting that call option holders were largely in the money. The notional value of the Bitcoin options expiry alone exceeded $4.6 billion, making it one of the largest monthly expiries of 2024.
Simultaneously, 92,000 Ethereum options contracts also reached their settlement date. The ETH options market had been particularly active in the preceding days, driven by extreme volatility following the unexpected SEC approval of spot Ethereum ETF filing requirements on May 23.
Ethereum ETF Approval: The Aftermath
Just eight days before the options expiry, the U.S. Securities and Exchange Commission delivered what many in the industry considered a shocking decision: approval of 19b-4 rule changes allowing eight separate spot Ethereum ETFs to list and trade on U.S. exchanges. The approval caught many observers off guard — Bloomberg analysts had been putting the odds at as low as 25% as recently as the Monday before the decision.
The market reaction was swift and dramatic. Ethereum’s price surged from below $3,000 to nearly $3,900 in the days surrounding the announcement, representing a gain of over 30%. However, by May 31, ETH had settled back to approximately $3,760 as the initial euphoria gave way to a more measured assessment of what comes next.
The critical caveat is that the 19b-4 approval only covers the exchange listing rules. The actual registration statements (S-1 forms) for each ETF remain under SEC review, meaning the funds cannot begin trading until that separate process is completed. Analysts have speculated that the final approval for trading could take weeks or even months.
The Staking Question Looms Large
One of the most significant details to emerge from the Ethereum ETF approval process was the SEC’s apparent insistence that all eight ETF issuers amend their registration statements to explicitly preclude staking of any ether held by the funds. This requirement reflects the SEC’s ongoing legal position that pooled ether staking may constitute an investment contract — effectively treating it as a securities activity.
For the Ethereum ecosystem, this is a meaningful limitation. Staking is fundamental to Ethereum’s proof-of-stake consensus mechanism, providing network security while generating yields of roughly 3-4% annually. By barring ETFs from participating in staking, the SEC is denying fund investors access to a significant revenue stream that would otherwise make these products more attractive relative to direct ether holdings.
Despite this restriction, the SEC’s classification of the ETF shares as “Commodity Based Trust Shares” carries important implications for ether’s regulatory status, suggesting the commission views the underlying asset as a commodity rather than a security — at least in the context of spot market trading.
Why This Matters
The convergence of a massive options expiry with the ongoing Ethereum ETF narrative represents a pivotal moment for crypto market structure. The heavily bullish options positioning, reflected in the 0.37 put/call ratio, indicates that sophisticated derivatives traders remain confident in Bitcoin’s trajectory despite the consolidation around the $67,000 level. For Ethereum, the ETF approval marks the beginning of a new era of institutional access — even if the actual launch date remains uncertain. The approval also signals a potential softening of the SEC’s historically adversarial stance toward crypto assets, though the staking prohibition shows that significant regulatory friction persists. With the total crypto market capitalization at approximately $2.69 trillion and Bitcoin dominance hovering near 58.7%, the stage is set for a summer that could see significant capital flows as institutional products for both major cryptocurrencies become available to mainstream investors.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.
put/call ratio of 0.37 on $4.6B in BTC options is insane. traders are overwhelmingly betting on upside and the max pain at $66K confirms it
0.37 put/call ratio also means a lot of unprotected downside. if btc dumps below $66K the max pain flips and calls get destroyed. works both ways
thats why the smart money hedges. anyone naked long those calls without protection is gambling, not trading
0.37 p/c ratio with $4.6B notional is peak complacency. one bad CPI print and all those calls become toilet paper. seen it happen three times
vol_crusher 0.37 p/c on $4.6B was peak euphoria. one CPI miss and those calls were wallpaper. seen it too many times in options cycles
yield_curve_ one CPI miss and those calls were wallpaper is right. July 2024 CPI came in hot and the entire options structure repriced in minutes. max pain held though
vol_crusher peak complacency is the perfect label. 0.37 p/c on $4.6B meant everyone was positioned for up-only. the unwind when ETH ETF euphoria faded was brutal for call holders
Renata P. 0.37 p/c on $4.6B was the most crowded trade of 2024 Q2. the unwind in July proved that max positioning = max vulnerability
ETH going from $3K to $3.9K in a week on ETF approval and people still call it overvalued. the $8K standard chartered target doesnt seem crazy anymore
ETH from $3K to $3.9K in a week on 19b-4 approval but S-1 still pending. the real pump comes when institutions can actually buy
standard chartered called $8K ETH before the ETF even had S-1 approval. bold call but the institutional demand thesis is real. might take until 2027 though
ETH at $3760 after the ETF pop and S-1 still nowhere. standard chartered calling $8K felt bold in May but institutional flows take quarters not weeks to materialize
max pain at $66K with BTC trading at $67.4K. options market makers had every reason to pin it there into expiry
0.37 put/call ratio with $4.6B notional is wild. everyone was positioned for up only and one red candle would have cascaded
69K BTC options expiring with 0.37 put/call ratio on $4.6B notional. everyone was positioned for up only and ETH S-1 was still nowhere close. classic timing mismatch
ETH S-1 approval dragged on for months after this. anyone who bought the 19b-4 approval pump at $3.9K was underwater until November. the options market got it wrong on timing
ivan_max_ the S-1 timeline killed everyone who bought the 19b-4 pump. options market was pricing perfection and the SEC moved at glacial pace
S-1 delay crushed everyone who bought the 19b-4 pop. options expiry at the worst possible moment. you had the right thesis but the wrong timeline