Billions of dollars’ worth of bitcoin and ether options are set to expire on Friday, with traders staying broadly bullish while increasing hedges against near-term downside risks.

Bitcoin options totaling roughly $8.5 billion in notional value will expire on Deribit at 08:00 UTC. Deribit is the world’s largest crypto derivatives exchange by both trading volume and open interest. The notional figures reflect the U.S. dollar value of outstanding contracts, with each option linked to one bitcoin or one ether.

The crypto options market has expanded sharply since the 2020 COVID-driven market crash, as institutional participation grew and derivatives became a key tool for hedging and yield strategies. Call options generally signal bullish expectations, while put options are used to protect against or profit from price declines.

Positioning into the expiry remains tilted toward calls, as shown by the put-to-call ratio.

“The put-call ratio for this expiry is 0.56, suggesting that month-end positioning remains skewed toward bullish calls,” Sidrah Fariq, global head of retail sales and business development at Deribit, told CoinDesk.

That bullish tilt implies traders had been looking for stronger price performance in January. Bitcoin, however, is up only around 2% for the month, according to CoinDesk data.

Momentum could improve if Wednesday’s Federal Reserve rate decision points to easier liquidity conditions. Bitcoin, like technology stocks, has historically benefited from lower interest rates and more accommodative monetary policy.

At the same time, traders are actively building downside hedges ahead of the Fed meeting.

“Recent flows show strong demand for put diagonal calendar spreads and concentrated downside positioning in Jan. 30 expiries, with notable interest in $88,000 and $85,000 bitcoin puts over the past 24 hours,” Fariq said.

“With markets largely expecting the Fed to keep rates on hold, traders appear focused on hedging event-driven volatility rather than positioning for a policy-led selloff,” she added.

Ether options with a notional value of about $1.3 billion will also expire on Friday alongside bitcoin contracts.

While major monthly and quarterly expiries can trigger short-term volatility, they are unlikely to have a lasting market impact. Bitcoin’s upcoming $8.5 billion expiry, for example, represents less than 1% of its roughly $1.7 trillion market capitalization.