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The Bitcoin options market is revealing a significant shift in sentiment among traditional finance players. As of May 13, the average strike price on IBIT options has fallen below the current Bitcoin spot price – a clear indication that institutional investors are increasingly seeking downside protection. Despite this defensive positioning, the total option delta has climbed to nearly $10 billion, suggesting considerable market exposure remains in play.

Current Market Indicators

Pricing & Volatility Metrics:

• Spot BTC: $103,209.83

• IBIT: $58.63

• BVIV, or Bitcoin Implied Volatility: 47.02

The BVIV dropping below 50 signals a temporary cooling of market volatility following recent price fluctuations, though this calm may prove deceptive with major expiries approaching.

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Open Interest Remains Robust

Total open interest continues to hold above $40 billion following April’s surge. IBIT now commands approximately 44% of the BTC options open interest compared to Deribit:

• Deribit BTC: $30.0B

• IBIT: $13.3B

• Total OI, with BTC ETF options included: $44.3B

Delta Exposure Approaching Critical Threshold

The total delta exposure is nearing the $10 billion mark, fueled by momentum in call options sales:

• Deribit BTC: $5.7B

• IBIT: $3.5B

• Total Delta, with BTC ETF options included: $9.6B

Notably, traditional finance flows exhibit more directional bias than crypto-native positioning, with IBIT’s OI-weighted average delta at 26.42 compared to Deribit’s 18.97.

Approaching Expiry Concentration

Several large delta expiries are on the horizon, creating concentrated exposure that could trigger sharp hedging flows:

• IBIT – May 16: $1.2B

• Deribit BTC – May 30: $1.8B

• Deribit BTC – June 27: $1.5B

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Traditional Finance Shifts to Defensive Positioning

Traditional finance players are actively pricing in higher downside probability. IBIT’s average strike price has fallen to $99,383, now sitting below the spot BTC price of $103,209.83. Meanwhile, Deribit’s average strike remains optimistic at $114,618.

Adding to this defensive outlook, traditional finance positioning has reversed its previous trend toward longer-dated options, now favoring shorter timeframes: