These holders use existing collateral to fund positions without buying delta outright first, making them net sellers when they sell calls.
Bitcoin News
Long-term Bitcoin holders are creating downward pressure on spot prices by selling covered call options, according to market analyst Jeff Park. This strategy allows sellers to collect premiums by offering buyers the right to purchase assets at predetermined future prices without any obligation.
Market makers purchasing these covered calls must hedge their exposure by selling spot Bitcoin, which forces prices down despite strong demand from traditional exchange-traded fund investors. The problem stems from how these transactions affect market dynamics differently than fresh capital inflows.
When traditional ETF investors buy IBIT and sell calls against it, they add net positive delta to the market because they purchase the ETF at 100% delta, then sell calls at 20-50% delta. Most ETF flows represent true inflows coming into Bitcoin for the first time, creating genuine new demand.
Long-term holders with decade-old Bitcoin inventory only add call selling as fresh delta to the market, which creates negative pressure. These holders use existing collateral to fund positions without buying delta outright first, making them net sellers when they sell calls.
This covered call strategy explains the relentless selling from Bitcoin whales documented since 2021, even before ETF launches. The monetization of existing collateral through options creates adverse effects because it adds long gamma across dealer desks, forcing market makers into dynamic hedging that recreates mean reversion around various strikes.
BlackRock's IBIT ETF shows major divergence in upside skew compared to native Bitcoin options on platforms like Deribit. IBIT displays positive call skew premium in the 120-150% range over longer durations, while Bitcoin skew remains downward sloping through 150%, indicating traditional participants buy upside volatility while crypto-native participants sell it.
IBIT options reached $41 billion in open interest as of Dec. 12, representing over 50% of total assets under management and doubling in under six months. However, Deribit's open interest also grew to around $46 billion, meaning IBIT has not materially closed the gap despite explosive growth.
Bitcoin decoupled from stock markets in late 2025 as equities printed fresh highs while Bitcoin fell back toward $90,000. Analysts forecast price rallies may resume when the Federal Reserve continues rate cuts and injects liquidity into financial systems, though only 24.4% of traders expect another cut at January's FOMC meeting, according to CME Group's FedWatch tool.
The analysis concluded that Bitcoin price remains steered by the options market and will stay choppy as long as whales continue to extract short-term profits from their stash by selling covered calls instead of holding or selling spot.
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