A Quiet Move In Bitcoin Options Is Starting To Raise Big Questions

Bitcoin’s six-week collapse has erased over $40,000 from its worth, but—in line with Jeff Park, CIO at ProCap BTC and Bitwise advisor—the extra necessary story might lie not in spot markets however in volatility.

In his November 22 Substack post “Where Does Bitcoin Go From Here?”, Park argues that “market construction has flipped sharply adverse,” citing ETF outflows, the Coinbase low cost, structural promoting, and liquidations of over-levered longs. But beneath that floor stress, he says, “one thing within the construction of Bitcoin’s volatility markets is stirring once more—one thing that appears extra just like the outdated Bitcoin, not the brand new one.”

Sudden Twist In Bitcoin Skew Has Expert On High Alert

For practically two years, the consensus has been that the ETF period “tamed Bitcoin” and “crushed volatility.” Spot ETFs channeled institutional flows into volatility-muting buildings, dampening the wild swings that after outlined BTC. Yet Park notes that over the past 60 days, implied volatility (IV) has trended larger for the primary time in 2025. Even extra telling: IV stored rising whereas spot fell—an unusual dynamic since ETFs launched. That, he says, “is likely to be the primary sign of a regime shift” again towards pre-ETF market conduct.

Historical context sharpens his level. Between 2021 and 2022, IV spiked repeatedly—156% throughout China’s mining ban, 114% within the Luna/UST collapse, and once more within the 3AC and FTX crises. Since FTX, volatility “has by no means traded above 80%,” and vol-of-vol (the “velocity” of volatility itself) has remained under 100, a post-ETF sample of subdued convexity. But the newest upward drift, Park argues, means that the “convex, breakaway vol conduct” that after outlined Bitcoin could possibly be re-emerging.

That shift carries structural implications. During previous crises, put skew widened sharply, reaching –25%. But Park highlights an reverse form of stress take a look at—January 2021—when name skew surged above +50% and triggered Bitcoin’s final “mega-gamma squeeze.” Dealers brief name gamma had been compelled to purchase spot right into a rising market, pushing BTC from $20,000 to $40,000 in weeks. It was, he recollects, “the primary time Deribit noticed file retail flows as merchants found the facility of OTM calls.”

Today’s skew information seems totally different however probably telling. “The 30-day put skew is the bottom it has been all yr,” Park writes, suggesting defensive premiums are elevated and “additional volatility to the draw back is just not unwarranted.” Yet Deribit’s open curiosity exhibits a market nonetheless leaning bullish in notional phrases.

As of November 22, the most important positions embody roughly $1 billion in Dec 26 $85k places, $950 million in $140k calls, and $720 million in $200k calls—extra upside than draw back publicity general. Similarly, the most important IBIT options are “extra calls than places, and the vary of strikes are extra OTM than the places.”

Park’s broader thesis is that volatility itself might once more turn into Bitcoin’s catalyst. He attracts parallels to February–March 2024, when sustained ETF inflows and a gentle vol bid preceded a dramatic melt-up. “Wall Street wants high volatility for Bitcoin to be attention-grabbing,” he writes, noting that institutional desks chase pattern P&L into year-end, and “volatility is a reflexive machine.”

Whether that machine is restarting stays unsure. Park concludes that if spot continues to fall whereas IV climbs, “the case strengthens {that a} sharp upside reversal may materialize.” But if vol stalls or slips as worth declines—“traditional sticky-delta conduct”—then the drawdown might harden into “the early contours of a possible bear pattern.”

In essence, Park’s message is that Bitcoin’s most revealing sign isn’t worth however construction. After two years of ETF-driven calm, volatility is transferring once more—and in Bitcoin’s historical past, when vol wakes up, worth not often stays nonetheless for lengthy.

At press time, BTC traded at $85,912.