Bitcoin Options Market Hits Three-Year Extreme as Divergence with Global Money Supply Widens

The Bitcoin options market has reached an extreme defensive positioning since the FTX collapse in November 2022, despite no comparable fundamental crisis in crypto markets or the broader economy. Binance Research's weekly report notes that this degree of hedging appears disproportionate and may indicate a sentiment trough rather than a precipice. The BTC options 25-delta skew index has hit its most negative reading since November 2022.

The current environment lacks any equivalent fundamental shock, with no major exchange collapse, regulatory crisis, or systemic failure. However, the Realized Profit/Loss ratio of Bitcoin has fallen below 1.0 for the first time since 2023, typically a hallmark of forced capitulation rather than orderly distribution. This suggests that market participants may be closer to a sentiment trough than a precipice.

The divergence between Bitcoin and rising global M2 money supply has extended beyond any prior episode in the dataset's history. Binance analysts attribute this gap to three overlapping structural distortions: dollar weakness mechanically inflating the dollar-denominated M2 aggregate, the post-ETF institutional ownership structure classifying BTC alongside software equities in risk management systems, and elevated real interest rates keeping large liquidity pools parked in money market funds.