On December 26th (this Friday), over $23.6 billion worth of Bitcoin options will expire. This is the largest single-date options expiration event in Bitcoin history, and it holds significant implications for holders.

To understand why this is so critical, first, it’s important to grasp the role that options expiration plays in the market. Options are essentially leveraged bets on price movements — call options bet on rising prices, while put options bet on falling prices. When these options contracts expire, two outcomes can occur: they either become worthless, or they trigger hedging operations in the underlying spot market, causing large buy or sell pressures to be released instantly.

Imagine the risk exposure changes in trading accounts caused by a $23.6 billion fund flow within a single day — this is the root cause of market volatility.

Look at this data sequence to understand how the market has evolved:
End of 2021 expiration: $6 billion
2022: $2.4 billion
2023: $11 billion
2024: $19.8 billion
2025: $23.6 billion

This is no longer a retail-driven market — it’s institutional-level risk being re-priced in real time.

Why is Friday expected to become a market focal point? Traders have already set up hedging strategies at key price levels. Once the options expire, these protective measures also disappear. This can unleash significant price volatility, especially during holiday periods when liquidity is already scarce. A sharp reduction in order volume means each large trade can have a doubled market impact, potentially triggering notable price swings even without any news catalysts.

Many large open positions are concentrated around psychological price levels like round numbers — after expiration, the anchoring effect of these levels disappears, often leading to pre-expiry probing and rapid post-expiry movements.

Volatility this week is expected to be exceptionally high. Instead of just focusing on the price on Friday itself, it’s better to pay attention to the evolving trend after options expiration — that’s the real test for market participants.