The Bitcoin market remains boring. Investors chasing yields may be partly to blame

Yield hungry investors seem to have influenced market flows such that they limit price swings.

What to know:

• Bitcoin has traded in a tight range around $70,000 since mid-February.
• Institutional investors have been selling covered call options on their bitcoin holdings to generate extra yield, shifting significant gamma exposure to market makers.
• Market makers’ hedging of this positive gamma seems to have mechanically suppressed price swings and driven down bitcoin volatility indices.

The bitcoin BTC$67,264.05 market has been stuck in a rut for over a month, and investors chasing yields may be partly to blame.

Since mid-February, BTC has traded in a range centred on $70,000. Some observers say counteracting forces have been at play. The Iran war-led haven demand has been supporting BTC around $65,000, while rising U.S. Treasury yields have been holding back big gains beyond $75,000.

But another factor appears to have been quietly keeping bitcoin trapped in its range, and it's tied to investors using call options to generate additional yield on top of their spot market holdings.

"Throughout Q1, institutional participants have been systematically overwriting calls at higher strikes to harvest premium in a down/sideways market. That activity transferred significant gamma exposure to dealers, who have been hedging by buying into dips and selling into rallies to maintain delta neutrality," James Harris, CEO at Tesseract, the MiCA-licensed, multi-strategy digital asset manager.

Options are derivative contracts that give you the right to buy or sell the underlying asset, in this case, BTC, at a preset price at a later date. A call option gives the right to buy and represents a bullish market bet. A put option offers protection against price slides in BTC.

Think of it like reserving a concert ticket today for a small fee. You can buy it later at the reserved price, even if the ticket goes up, or sell your reservation to someone else for a profit. The ticket seller, meanwhile, keeps the small fee.

That’s essentially what traders have been doing—they’ve become the ticket sellers. By selling call options, they collect premiums (the fee) while covering the call buyer on potential BTC price rallies. And they do this against their existing bitcoin holdings. That's called the covered call strategy, a way of generating additional yield on top of spot holdings.

Now you might be wondering: what does this have to do with bitcoin’s range play? The answer lies in knowing that traders have been shorting, or selling, these calls to market makers – the firms that take the other side of these option trades.

By selling these calls, traders have left market makers with a position called positive gamma, which essentially means the market makers are forced to buy BTC as prices fall and sell BTC as prices rise to stay hedged. The result? A range-bound price action.

In other words, yield hunting by investors has been indirectly influencing market inflows in ways that limit price swings.

This also explains the decline in the bitcoin 30-day implied volatility index, BVIV, which stands in contrast to spikes in similar indices tied to equities, bonds and oil. The BVIV has declined 5% to 56% this month.

"The effect has been a mechanical suppression of realised volatility — the DVOL index has compressed by roughly six points this week despite the macro backdrop," Harris said.

More For You

As stablecoins evolve into core financial infrastructure, North America leads. This report maps the regulation, market shifts, and players driving adoption.

Why it matters:

Stablecoins are entering their third phase of evolution - the institutionalization era - becoming increasingly embedded into core financial infrastructure. As institutions prioritize transparency and compliance, regulated issuers like USDC, RLUSD, and PYUSD are steadily gaining share with RLUSD surpassing $1B in market cap within its first year. North America, leading in regulatory frameworks and institutional distribution, is at the center of it all.

Más para ti

The conflict's fifth week brought its widest expansion yet, with Iran-backed forces opening a new front and U.S. ground troops arriving in the region.

Lo que debes saber:

• Bitcoin briefly fell to $65,112, its lowest level since the war-related February crash, before rebounding above $67,000 as Asian markets opened.
• The latest escalation in the conflict, including Houthi involvement, new U.S. troop deployments and Iranian attacks on aluminum facilities, rattled global markets and pushed Brent crude to about $115...

Bitcoin recovers to $67,400 after dipping below $65,200 as Houthis enter Iran war

hace 1 hora

Hyperliquid traders in Tokyo get 200-millisecond edge, Glassnode research shows

hace 1 hora

Stablecoin payments go 'invisible' in Southeast Asia as crypto card business surges

hace 12 horas

Strategy may have paused bitcoin accumulation last week, ending a thirteen week buying streak

hace 12 horas

No one is 100% happy with the stablecoin yield agreement: State of Crypto

hace 13 horas

Bitcoin bullish bets hit a 28-month high on Bitfinex, and that's music to bears' ears

hace 13 horas

Bitcoin miners are becoming AI companies and selling their BTC to fund the transition

28 mar 2026

Crypto stocks battered as Nasdaq enters correction in $17 trillion market rout

27 mar 2026

Canada moves to ban crypto donations for election campaigns following UK

28 mar 2026

Bittensor ecosystem tokens' value hit $1.5 billion as Jensen Huang endorsement supports TAO rally

hace 17 horas

New Ethereum project aims to fix network fragmentation and improve user experience

hace 16 horas

Here's what next as Anthropic's most powerful AI model leaked via unsecured data cache

28 mar 2026

In this article

BTCBTC$67,264.05◢0.94%