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Even though Bitcoin (BTC) has succeeded in staying in the green zone after the beginning of the war between the U.S.-Israel and Iran, the latest data on options trading suggests fear among the investors.
Since the war began on Feb. 28, gold's price has dropped 15% to $4,504 per ounce at press time. Since then, Bitcoin had risen nearly 12% to the north of $71,500 on March 25.
However, BTC fell to $66,179.23 at press time as Bitcoin options worth $14.16 billion on Deribit expired on March 27.
Still, Bitcoin is up 4% since the beginning of the war, while gold is down 15%.
It means Bitcoin traders are still not bullish despite the cryptocurrency's relatively better performance than gold during the war.
Related: Bitcoin faces major stress test as $14B expiry looms
Options are contracts that grant investors different types of rights.
While calls provide the right to buy an asset at a specific price within a set time frame, puts provide the right to sell an asset at a specific price within a given period.
Suppose Bitcoin's price is $70,000. If you think BTC will rise, you pay a premium and buy a call option to buy it at $70,000 after a month.
If the price rises to $80,000, the call option lets you buy BTC for $70,000 and make a profit of $10,000 (minus premium).
But if the price doesn't rise and instead falls to $60,000, you let go of the call option and only lose the premium.
A put option is just the opposite. Suppose Bitcoin is trading at $70,000. If you think if will drop further, you pay a premium and buy a put option to sell BTC at $70,000 after a month.
If the price falls to $60,000, the put option allows you to sell it at $70,000 and make a profit of $10,000 (minus premium).
But if the price doesn't fall and instead rises to $80,000, you ignore the option and lose the premium.
Lately, the demand for Bitcoin put options premiums has increasingly surpassed the demand for call premiums on the Deribit crypto exchange.
It means investors have been betting more on Bitcoin dropping than rising.
Garrett DeSimone, head of quantitative research at OptionMetrics, told TheStreet Roundtable that the 30-day CME Bitcoin implied volatility skew is a key metric in the options market that reflects the expensiveness of out-of-the-money puts relative to out-of-the-money calls.
If an option won't make money if exercised, it's out-of-the-money. An option is valuable only if the price moves in your favor, whether it's a bullish or a bearish expectation.
When the skew is positive—which it has been for months now, investors pay relatively higher premiums for insurance against the crash risk of Bitcoin, DeSimone said. Such a situation suggests negative sentiment among Bitcoin traders, he added.
In short, when the skew is positive, investors are more afraid of a Bitcoin crash than hopeful about a Bitcoin surge. So, they pay extra for crash insurance.
DeSimone further added,
"The skew has been steadily climbing higher starting in Q4 2025, as a result of the sharp selloff from Bitcoin's all-time high near $126,000, driven by tariff escalation fears, and fading expectations for further Fed rate cuts."
In fact, it was President Donald Trump's tariff shocker on Oct. 10 which had led to to the sell-off.
Two New York Stock Exchange-affiliated venues, NYSE Arca and NYSE American, recently filed rule changes to remove the 25,000 contract position and exercise limits on options for Bitcoin and Ethereum ETFs.
TheStreet Roundtable asked DeSimone whether the decision would centralize the market further and violate the crypto principle of decentralization as large institutions could then trade without any limits.
The decision, in theory, shouldn't centralize the Bitcoin market, he argued. He explained that Bitcoin ETFs act as derivative layer, not "outright BTC," so the relaxation on limits wouldn't centralize the market.
Bitcoin and Ether were trading at $65,783.23 and $1,977.16 at press
