While institutional investors drove the rally in 2025, they shifted to different strategies as we entered 2026.
Accordingly, institutional investors are increasingly turning to altcoin options.
According to CoinDesk, crypto derivatives trading firm STS Digital said that institutional investors’ options strategies are changing.
According to STS Digital, institutional investors are increasingly expanding options strategies, previously used primarily for Bitcoin, to the altcoin market in order to manage price volatility and generate additional returns.
The firm reported that institutions are now turning to altcoins and that there has been an increase in altcoin options trading, triggered by demand from venture capitalists, foundations, and large investors.
Maxime Seiler, co-founder and CEO of STS Digital, stated: “Our client base includes token projects and foundations, investors with large amounts of assets, and asset management firms that manage risk prior to liquidity events. Increasingly, we are seeing these participants applying option strategies historically used in Bitcoin to the altcoin space.”
Among the strategies chosen by institutions are covered call options, which involve selling a corresponding call option while buying an asset.
Other strategies include selling put options to bet against sharp declines, hedging downside risk, and buying call options to prepare for a potential upside.
According to STS Digital, investors are adopting these strategies to keep their risks under control while minimizing the risk of forced liquidation, such as the event that triggered the price crash on October 10.
*This is not investment advice.
