$750M Bitcoin Options Expiry Looms as BTC Holds Above $13,000 Ahead of Halloween

Bitcoin held firmly above $13,000 on October 26, 2020, as traders braced for one of the largest options expiries of the year. With over $750 million in Bitcoin options contracts set to expire on October 30 — just one day before the 12th anniversary of the Bitcoin white paper — the crypto market found itself at a critical juncture between bullish momentum and derivatives-driven volatility.

TL;DR

• Over $750 million in Bitcoin options set to expire on October 30, 2020
• 61,000 BTC options expiring, with 40,000 held at Deribit exchange
• BTC price held at $13,082, up 0.3% on the day after touching 2020 highs near $13,490
• 190,000 ETH options worth $76 million also expiring the same day
• Expiry coincides with US presidential election week, adding uncertainty

Bitcoin Consolidates Near Yearly Highs

Bitcoin’s rally through October 2020 had been nothing short of remarkable. Fresh off PayPal’s blockbuster announcement that it would enable cryptocurrency buying, selling, and holding for its 346 million users, BTC surged past $13,000 for the first time since mid-2019. On October 26, the price sat at approximately $13,082, registering a modest 0.3% daily gain on Kraken, where $262.5 million was traded across all markets that day.

The momentum was real. Bitcoin had gained over 8% in the prior week alone, pushing its monthly gains into double digits. The September 25 options expiry — which saw 87,000 BTC in options expire with virtually no market impact — had since been followed by a 24.4% price appreciation, demonstrating the underlying strength of the bull run.

The $750 Million Question

Data from analytics firm Skew.com revealed the sheer scale of the impending expiry: 61,000 Bitcoin options contracts with a notional value exceeding $750 million were scheduled to settle on October 30. Deribit, the dominant exchange for crypto derivatives, held 40,000 of those contracts. Another 190,000 ETH options, worth approximately $76 million, were also set to expire on the same date.

What made this expiry particularly noteworthy was the concentration of open interest near current price levels. According to Skew’s analysis, more than 7% of the expiry’s open interest was clustered at the $13,000 strike. Strike prices at $12,000, $12,500, $13,000, and $14,000 all had over 2,000 Bitcoin options open. The largest put position sat at $9,000 with more than 5,000 contracts.

Election Week Adds Fuel to the Fire

The timing of the expiry could hardly have been more dramatic. Settling just days before the US presidential election on November 3, the options expiry landed squarely in a window of heightened macroeconomic uncertainty. Deribit’s own analysis noted that the term structure of BTC options showed clear “humps” indicating expected sharp price movements during the election week of October 30 through November 6.

“The increased volatility is expected to continue at least until the end of Q4,” Deribit’s research team wrote in their market outlook. With October implied volatility marked below 40, Skew observed that dealers appeared to be long against overwriters — a positioning that could amplify price swings if spot Bitcoin moved sharply in either direction.

Ethereum Faces Its Own Expiry Pressure

While Bitcoin dominated headlines, Ethereum was not immune to the derivatives-driven tension. ETH traded at $393.64 on October 26, down 3.1% on the day with $52.3 million in volume on Kraken. The 190,000 ETH options expiring on October 30 represented an additional layer of uncertainty for the second-largest cryptocurrency, which had also enjoyed a strong weekly performance exceeding 8%.

The DeFi sector, which had been a primary driver of Ethereum’s summer rally, continued to attract both capital and controversy. Total value locked in DeFi protocols had surpassed $11 billion by late October, but the sector’s rapid growth had also exposed vulnerabilities — as the Harvest Finance exploit on this very day would soon demonstrate.

Lessons from September’s Non-Event

For all the apprehension surrounding large options expiries, recent history offered a word of caution against overreaction. The September 25 expiry of 87,000 Bitcoin options — 77% of which were held on Deribit — had been widely expected to trigger volatility. Instead, Bitcoin opened that day at $10,248 and closed at $10,771, a modest gain with no unusual turbulence. Markets had proceeded to rally significantly thereafter.

The lesson was clear: while options expiries can create short-term noise and temporary volatility, the underlying market fundamentals — PayPal’s institutional embrace, growing adoption, and Bitcoin’s post-halving supply dynamics — were the real forces driving price action. Traders would do well to keep their eyes on the bigger picture as the Halloween expiry approached.

Why This Matters

The October 30, 2020 options expiry represented a defining moment in Bitcoin’s maturation as an asset class. The sheer size of the open interest — $750 million in BTC options alone — reflected the explosive growth of crypto derivatives markets throughout 2020. More importantly, the convergence of this expiry with the US election and Bitcoin’s white paper anniversary created a perfect storm of market narratives. Whether the expiry would prove to be a catalyst for further gains or a temporary headwind, one thing was certain: Bitcoin had firmly re-entered the mainstream financial conversation, and institutional derivatives markets were playing an increasingly central role in price discovery.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making investment decisions.