The bitcoin options market is braced for heightened volatility, with over 20% of open interest on Deribit set to expire in-the-money (ITM), several analysts said to The Block on Wednesday.

"As we approach Friday’s large quarterly expiry, potentially influenced by ‘quadruple witching’ and related volatility in U.S. markets, over 20% of Deribit open interest is set to expire in-the-money, equating to over $2.7 billion, total notional size of Friday's options expiry is over $10 billion," Deribit CEO Luuk Strijers told The Block.

A quadruple witching occurs four times a year, around the end of each quarter, when contracts for index futures, index options, options, and futures all expire simultaneously. This event often leads to increased volatility and trading volume. Because a …