Bitcoin Options Traders Dump Hedges Before Fed Meeting
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Bitcoin options traders have cut the put/call open-interest ratio to about 0.52 from roughly 0.76 in late June, according to Glassnode — a pattern of stepping back from hedging rather than adding to it.
- Large Bitcoin traders are accumulating $70,000 strike calls and bull call spreads, signalling expectations of upside in the spot price.
- One-week downside protection has collapsed: the 25-delta skew has fallen to around 4% while three- and six-month contracts hold at 11-12%, indicating traders are still paying for insurance against later turbulence but not this week.
- Implied volatility is compressed across the curve at 34.3% for one week versus 40.8% for six months — an uphill slope that is unusual ahead of a scheduled macro event.
- Markets have priced only a roughly 15% odds of a July rate increase, making the low near-term pricing defensible on the base case.
- Bitcoin held near $65,000 through the past week, including during Thursday's $797 billion selloff in the largest U.S. technology stocks.
- Binance held roughly 55% of user funds and around 24% spot share, drawing net inflows in early July while the broader tracked market saw outflows.
Why it matters: With the put/call ratio cut nearly in half since late June and one-week downside protection priced at just 4%, options markets have effectively pulled their safety net ahead of Wednesday's FOMC. If the Fed's statement or projections deviate from the ~85% priced-in no-change path, the thin positioning is positioned to amplify Bitcoin's move rather than absorb it.
