Bitcoin perpetual swaps stabilize amidst year-end, Ethereum options on track for short-term volatility: report

The latest report from Bybit and Block Scholes reveals that the Bitcoin options market remains stable despite year-end expirations, while Ethereum options are ripe for short-term fluctuations.

According to a report published by crypto exchange Bybit and analytics platform Block Scholes, open interest in Bitcoin (BTC) perpetual swaps remained stable through year-end expirations. This stability came as a surprise, as options approaching expiration often cause price fluctuations.

The report suggests that investors are cautious but confident enough about the stability of their options that they are not overly reliant on perpetual contracts to hedge the delta of expiring options. As a result, Bitcoin OI has remained relatively stable, despite experiencing slight volatility and failing to reach its December highs.

As previously reported by crypto.news, Bitcoin futures OI has fallen below the $60 billion threshold. Total BTC OI currently stands at around $56.6 billion after falling in early January 2025. However, it did not fall as much as the levels in early November, when it fell below $40 billion.

The report predicts that implied volatility term structure for BTC options remains steep, with implied volatility remaining at 57% over a one-week period, five points lower for options trading.

Most of the expired open positions have not yet been reinvested, leading to a neutral buying balance. This shows that BTC has limited leverage compared to where the options market was at the beginning of December 2024.

Comparison between BTC and ETH Open Interest models as of the end of December 2024 | Sources: Bybit, Block Scholes

Similarly, Ethereum (ETH) options remained stable until the end of December 2024. However, the spot price of ETH shows lower volatility compared to the short-term implied volatility.

Last week, the implied volatility term structure for ETH options dropped briefly before plateauing again. Unlike BTC’s steady pullback, ETH’s pattern shows that the options market is preparing for potential short-term fluctuations in spot price movements.

Despite approaching expiration dates, ETH call options gained momentum in early 2025. At the time of this writing, Ethereum OI stands at $25.5 billion, returning to mid-December levels.