How the spring explodes. An analysis ---------------------------------------- 1. Right now, there are about 1MM BTC in the ETF 2. Most of this is passive: RIAs, pensions, long-only allocators. 3. Total call open interest is huge (~5.2M contracts) BUT 4. That does not mean 500k BTC is for sale. 5. Roughly 40,000 BTC has covered calls written ABOVE spot. This is the OG targeted selling + convexity monetization. 6. Market makers are long calls. To hedge, they short BTC with perps. 7. Put numbers on it. 40k BTC worth of calls: At 90k → MM short ~8k BTC At 100k → MM short ~20k BTC At 110k → MM short ~32k BTC 8. This is why the market feels dead: – downside doesn’t accelerate – upside keeps stalling 9. If price rises quickly, everything breaks. At higher levels (say 125k–130k): Calls go deep ITM. Delta → 1 Gamma → 0 10. The MM book becomes: – long synthetic BTC – short real BTC - flat P+L but balance sheet blows up 11. At the same time: – covered-call supply is gone – no time to reload new calls – perp shorts are stressed – liquidations kick in (james wynn) 12. This is how vol can explode.