Bitcoin’s $40K put now ranks as the second-biggest options wager going into February expiration.

A buildup of positions at lower strike prices is signaling rising demand for downside protection in bitcoin after its recent sharp pullback.

The $40,000 put option has become one of the most prominent bets ahead of the Feb. 27 expiry, reflecting heightened interest in hedging against further losses. Put options grant holders the right, but not the obligation, to sell bitcoin at a specified price before expiration, effectively functioning as insurance if the market drops below the strike.

The $40,000 strike is now the second-largest by open interest, with roughly $490 million in notional exposure tied to that level. The sizeable positioning points to growing appetite for tail-risk hedges. Bitcoin has fallen as much as 50% from its October high and is currently trading near $66,000, prompting traders to reassess exposure and increase protective positioning.

Data from Deribit, the Dubai-based derivatives venue owned by Coinbase, shows that approximately $7.3 billion in bitcoin options notional value is set to expire at the end of the month.

Meanwhile, about $566 million in open interest is concentrated at the $75,000 strike, which also represents the “max pain” level — the price at which the largest number of options contracts would expire worthless, minimizing payouts to buyers. With bitcoin trading below $75,000, a move higher into expiry could ease pressure on call writers.

Although call contracts still exceed puts overall — 63,547 calls versus 45,914 puts — the market’s positioning is not purely bullish. The put-to-call ratio of 0.72 suggests upside bets remain dominant, yet the heavy concentration of put open interest at lower strikes underscores meaningful demand for downside insurance.

In effect, traders are keeping exposure to a potential rebound while simultaneously protecting against the risk of another sharp decline.

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