Bitcoin options with a notional value of $11 billion are set to expire and settle tomorrow, with traders wary of increased volatility around the midterm elections.

October 29 - According to Bloomberg, Bitcoin options with a notional value of approximately $11 billion are set to expire on October 30, accounting for about one-third of the open interest in Bitcoin options on the Deribit platform. Traders are wary of potential increased price volatility around the expiry settlement and the U.S. midterm elections on November 3. Among the expiring contracts, call options outnumber put options, with strike prices concentrated at $90,000, $95,000, and $100,000; as Bitcoin hovers around $80,000, these high-strike contracts are likely to expire worthless.

Adam Haeems, head of asset management at Tesseract Group, said that about 70% of the expiring options' Gamma is concentrated in the $75,000 to $82,000 range. Gamma reflects the impact of price changes on market makers' hedging needs. Among strike prices below $80,000, put options outnumber call options by more than two to one. He emphasized that public data cannot determine the direction of market makers' positions; if they hold short options, hedging operations could accelerate Bitcoin's decline in the $75,000 to $78,000 range, while opposite positions could cushion the fall.

Caroline Mauron, co-founder of Orbit Markets, believes more pronounced volatility may emerge after Friday's expiry. Investors who hold coins and sell options typically sell new contracts after old ones expire, but some sellers may wait until after the midterm elections to act. She said reduced regular Gamma supply could amplify price swings during the period when election results are announced.

The election results could also affect Trump's ability to advance pro-crypto policies. A Bloomberg Market Pulse survey shows that if Republicans retain both chambers of Congress, the median year-end Bitcoin price forecast among respondents is $90,800; if Democrats control both chambers, it is $76,450; if the two parties split control of the chambers, it is $84,100.

Paul Howard, senior director at Wincent, said the election may prompt investors to buy more put options near the current price to hedge against further declines. He expects a notable rebound in volatility in November after volatility was at historically low levels over the past year, and the market will also increase positions that benefit from price fluctuations.