Bitcoin Nears All-Time High as Options Market Expands 40x

The cryptocurrency market is witnessing a structural shift as Nasdaq approved a dramatic 40x expansion in options limits for BlackRock’s IBIT, increasing the cap from 25,000 to 1 million contracts. According to market watchers including long-time Bitcoin advocate Max Keiser, this development represents a critical breakthrough that could remove barriers to larger institutional flows. Market experts had previously described the 25,000 contract limit as “discriminatorily small” and argued that 400,000 contracts would be a more reasonable baseline given current demand.

The expanded derivatives capacity places IBIT into a mega-cap derivatives category, unlocking follow-on effects for how banks and funds structure exposure to bitcoin. This change enables market makers to hedge larger positions without hitting the previous size wall, which can lower spreads and deepen available liquidity. The expansion addresses concerns that Keiser first raised in 2017 about Bitcoin market makers needing to expand their inventory to support higher prices, with the current development potentially setting the stage for new all-time highs.

The derivatives market expansion is already triggering responses from major financial institutions. JPMorgan is reportedly preparing Bitcoin-backed structured notes that would track BlackRock IBIT, according to market reports. These products could channel steady, institutional flows into the market rather than one-off spikes, creating a more sustainable foundation for bitcoin’s price appreciation.

The increased options capacity means banks can build structured notes that use IBIT as a reference without tripping existing risk caps. This development represents a significant maturation of Bitcoin’s institutional infrastructure, allowing traditional financial players to participate in the market through familiar product structures. The ability to create such instruments without encountering size limitations marks a crucial step in Bitcoin’s integration into mainstream finance.

While institutional derivatives markets expand, on-chain data reveals substantial accumulation across all investor cohorts. According to Glassnode’s Accumulation Trend Score, holders of 10,000 BTC or more have flipped to net accumulation and now show a score of 0.8, signaling strong buying activity. This represents a significant shift in behavior from the largest bitcoin holders, who had previously been more cautious in their accumulation patterns.

The buying momentum extends beyond the largest whales. The 1,000 to 10,000 BTC group has also turned positive for the first time since September, while the 100 to 1,000 BTC cohort has been in active accumulation since October and continued buying through recent declines. Even retail holders with less than 1 BTC are showing their strongest accumulation since July, indicating broad-based confidence in bitcoin’s prospects across the entire investor spectrum.

Bitcoin’s price behavior supports the narrative of strong underlying demand. The token fell into the low $80,000 area that served as support in May and then climbed back above $90,000 quickly, which many traders interpreted as a sign that the market sees value in the $80,000 zone. This price action suggests that institutional buyers are using dips as accumulation opportunities rather than panicking during corrections.

The average cost basis for US spot bitcoin ETFs was near $82,000, according to reports, and this figure has been cited as a reason institutions found the recent dip attractive. The quick recovery from the $80,000 level indicates that there is substantial buying interest at prices close to the ETF average cost basis, creating a solid foundation for further price appreciation as new institutional products come to market.

Despite the bullish developments, market risks remain present. Max Keiser had warned previously that when size limits blocked hedging, the market would be prone to pullbacks, and some analysts say that is part of the reason for recent volatility. The expansion of the options cap allows volume sellers to enter more smoothly, which could reduce erratic swings but will not erase market risk entirely.

Price spikes remain possible and downside moves continue to pose a real threat if flows slow or macro conditions shift. However, the combination of expanded derivatives capacity and strong on-chain accumulation creates a more robust market structure that may be better equipped to handle volatility. The ability for market makers to properly hedge larger positions could contribute to a more stable trading environment, even as bitcoin approaches potential new all-time highs.