Bitcoin Traders Eye Long Term BTC Accumulation By Selling Put Options

Would you offer insurance when expecting low odds of a claim being made? Most likely, you would, while pocketing the premium without a second thought. Bitcoin (BTC) traders are doing something similar in the Deribit-listed BTC options market, hinting at bullish price expectations.

Recently, an increasing number of traders have been selling (writing) BTC put options, likened to providing insurance against price drops in exchange for a small upfront premium.

They are implementing this strategy in a cash-secured manner by holding a corresponding amount in stablecoins, ensuring they can buy BTC if the market declines and the put buyer decides to exercise his right to sell BTC at the predetermined higher price.

This strategy enables traders to collect premiums (paid by put buyers) while potentially accumulating bitcoin if the options are exercised. In other words, it's the expression of a long-term bullish sentiment.

"There is a notable increase in cash-secured put selling using stablecoins—another sign of a more mature, long-term approach to BTC accumulation and a continued expression of bullish sentiment," Deribit's Asia Business Development Head Lin Chen told CoinDesk.

Chen said BTC holders are also selling higher strike call options to collect premiums and generate additional yield on top of their coin stash, which is weighing over Deribit's DVOL index, which measures the 30-day BTC implied volatility. The index has dropped from 63 to 48 since the April 7 panic selling in BTC to $75K, according to data from the charting platform TradingView.

"We observe that investors remain long-term bullish on BTC, particularly among crypto-native “holders” who are willing to hold through market cycles," Chen said.

Bitcoin's price has risen to over $92,000 since the early month slide to $75,000, supposedly on the back of haven demand and renewed institutional adoption narrative.

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