Latest Bitcoin Options Boom Raises Fears Of Capped BTC Upside

Bitcoin cash-and-carry trades faded toward the end of the year, leading funds to shift to Bitcoin options for yield. Is the strategy putting a cap on BTC price?

Covered calls gained traction as cash-and-carry returns collapsed, but data shows they are not structurally suppressing Bitcoin’s price.

Stable put-to-call ratios and rising put demand suggest hedging and yield strategies coexist with bullish positioning.

As Bitcoin (BTC) price entered a downtrend in November, traders began forming theories about why institutional inflows and corporate accumulation failed to sustain price levels above $110,000.

One explanation frequently cited is the rising demand for Bitcoin options, particularly those linked to the BlackRock iShares spot Bitcoin (IBIT) exchange-traded fund.

The aggregate Bitcoin options open interest climbed to $49 billion in December 2025 from $39 billion in December 2024, putting the covered call strategy under closer scrutiny.

Critics argue that by “renting out” their upside for a fee, large investors have unintentionally created a ceiling that prevents Bitcoin from entering its next parabolic phase. To understand this argument, it helps to view a covered call as a trade-off between price appreciation and steady income.

In a covered call strategy, an investor who already owns Bitcoin sells a call (buy) option to another party. This gives the buyer the right to purchase that Bitcoin at a fixed price, such as $100,000 by a specified date. In return, the seller receives an upfront cash payment, similar to earning interest on a bond.

This options strategy differs from fixed income products because the seller continues to hold a volatile asset, even though their potential upside is capped. If Bitcoin rallies to $120,000, the seller must sell at $100,000, effectively missing the additional gains.

Traders argue that this dynamic suppresses price action because professional dealers who purchase these options often sell Bitcoin in the spot market to hedge their exposure, creating a persistent “sell wall” around popular strike prices.

Source: CoinTelegraph