As Bitcoin price fell in November, theories emerged about why institutional inflows didn’t sustain levels above $110,000. Increased demand for Bitcoin options, especially tied to the BlackRock iShares spot Bitcoin ETF, led to aggregate options open interest climbing to $49 billion in December 2025 from $39 billion in December 2024.

Critics suggest covered call strategies, where investors sell call options for a fee, create a price ceiling for Bitcoin. This option differs from fixed income products as it caps potential upside. Traders argue this suppresses price action by creating a “sell wall” around popular strike prices when dealers sell Bitcoin to hedge their exposure.

The shift to options-based yield is a response to the collapse of the cash and carry trade, where traders sold BTC futures while holding an equivalent spot market position. Funds moved to covered calls for higher annualized yields of 12% to 18%, evident in the jump in IBIT options open interest from $12 billion to $40 billion.

Despite concerns about call options suppressing prices, the put-to-call ratio staying stable below 60% suggests a balance between yield-focused sellers and buyers positioning for a breakout. The recent defensive stance is reflected in the skew metric, with IBIT put options now trading at a 5% premium and implied volatility declining to 45% or lower.

Read more at Cointelegraph: Bitcoin Options Are Not Capping BTC Price