Analyst: Bitcoin Veterans Writing Covered Calls Are Causing Market Stagnation

Long-term Bitcoin (BTC) whales are employing a covered call strategy—selling call options that allow the buyer to purchase an asset at a set future price—resulting in suppressed spot BTC prices, according to market analyst Jeff Park.

These large BTC holders, often referred to as “whales” or “OGs,” create significant sell-side pressure through this strategy, particularly as market makers, who buy these covered calls, balance their exposure, Park noted.

This leads market makers to sell spot BTC to hedge their call exposure, pushing prices down despite robust demand from traditional exchange-traded fund (ETF) investors.

Since the BTC used to back these options has been held for an extended period, it does not reflect new demand or liquidity. Thus, the calls exert a downward pressure on prices. Park stated:

“When you already have the Bitcoin inventory that you’ve had for 10-plus years that you sell calls against it, it is only the call selling that is adding fresh delta to the market — and that direction is negative — you are a net seller of delta when you sell calls.”

The analysis concluded that the options market is influencing Bitcoin’s price, and price movements will remain volatile as long as whales continue to take short-term profits by selling covered calls.