Bitcoin Cryptocurrency exchange Deribit told CoinDesk that ETF holders and corporate finance departments, who have been praised for their long-term vision, are setting up insurance against prices falling below $60,000.
Jean-David Péquignot, chief commercial officer at derivatives exchange Deribit, said: “ETF holders and corporate finance departments are buying six-month and one-year puts (a $60,000 put, a derivatives contract that provides protection against potential prices falling below that level) at $60,000 or less as portfolio insurance.”
This put option works like insurance: Even if the price plummets, buyers can sell Bitcoin for $60,000, protecting ETF investors and corporate finance departments holding BTC from greater losses if they hold Bitcoin for the long term.
Péquignot was responding to a question about the surge in interest in the $60,000 put option. At the time of writing, the open interest value of these contracts is $1.5 billion, which is the highest of all contracts for execution and expiry on Deribit. On the exchange, one contract represents 1 BTC. The platform accounts for nearly 80% of global cryptocurrency options activity.
The surge in interest in $60,000 puts with expirations of six months or more suggests deep concerns that any price rally could quickly fail, paving the way for a deeper decline.
What makes this hedge even more noteworthy is the large Bitcoin supply held by ETF holders and corporate treasuries.
In recent years, investors have poured billions of dollars into U.S.-listed spot Bitcoin ETFs and similar products globally. U.S. funds alone have inflows of 1.26 million Bitcoins, accounting for approximately 6% of the total Bitcoin circulation. At the same time, listed companies hold approximately 1.14 million Bitcoins, accounting for 5.7% of the Bitcoin supply.
Bitcoin has been trading below $70,000, hitting lows near $60,000 earlier this month, CoinDesk data shows. The cryptocurrency has gained nearly 5% since Wednesday to trade near $67,500, but the options market remains unmoved, with puts continuing to trade significantly higher than calls, or bullish bets.
“While spot prices climb, the risk reversal in 25 delta remains stubborn. Volatility premiums for 30-day puts remain ~7% higher than calls, suggesting smart money is still paying for downside protection rather than chasing upside,” Péquignot said.
He added that volatility could increase as the price falls below $63,000. This is because traders and market makers creating order book liquidity have a “short gamma” of $60,000 or less.
This means that as prices approach $60,000, these entities may sell more funds to rebalance their overall exposure to neutral, thereby inadvertently increasing downside volatility.