Institutions Remain Cautious on Bitcoin as Inflation and Geopolitical Risks Loom
Bitcoin options reflect how large investors are positioning for moves in either direction: calls target upside, while puts protect against declines. Institutions are placing bets on both sides, suggesting that despite a rebound in the spot market, no clear consensus has emerged. U.S. inflation shapes expectations for Federal Reserve interest rates, while the U.S.-Iran conflict affects oil prices and risk appetite, making both key variables for crypto markets.
By April 10, Bitcoin had risen nearly 7% since Sunday that week but met resistance near $72,000. QCP Capital said there was demand for May-expiry calls on BlackRock’s spot Bitcoin ETF, IBIT, with a $45 strike price while IBIT was trading at about $40. On Deribit, the most popular bet was an $80,000 Bitcoin call. Investors were also continuing to buy puts as hedges while awaiting that day’s U.S. CPI data and U.S.-Iran ceasefire talks over the weekend.
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The history behind this eventBitcoin Volatility Keeps Falling as Institutional Hedging Caps Price Swings
Bitcoin has traded mostly around $70,000 since mid-February. Safe-haven demand stemming from the war in Iran has provided support at $65,000, while U.S. Treasury yields have constrained gains above $75,000. Tesseract CEO James Harris said institutions sold covered calls in the first quarter to collect premiums, forcing market makers to buy on declines and sell into rallies, thereby suppressing volatility.
On June 1, CryptoQuant researcher Axel Adler Jr. said one-week realized volatility had fallen 56% this quarter, from 39% to 17.2%. Bitcoin had remained between $60,000 and $80,000 for 114 consecutive days. Binance's 30-day inflows had increased by $5.6 billion since April, while wallets holding 1,000–10,000 BTC accumulated 55,450 BTC on May 30. Analysts expect a 10%–20% move after a breakout.
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