Institutional investors are increasingly applying bitcoin options strategies to altcoins to manage volatility and enhance returns, STS Digital told CoinDesk.
Maxime Seiler, co-founder and CEO of STS Digital, said the firm’s clients — including asset managers, token foundations, venture firms, and large holders — are extending strategies historically used in bitcoin markets, such as covered calls, put selling, and downside hedging, to a broader set of cryptocurrencies.
“Many of these strategies were once concentrated in bitcoin,” Seiler said. “We’re now seeing institutions bring the same playbook to altcoins.”
Options give buyers the right, but not the obligation, to buy or sell an asset at a set price on a future date. Call options provide upside exposure, while puts protect against declines. Sellers collect a premium in exchange for assuming risk, effectively acting as insurers.
In bitcoin markets, institutions commonly sell covered calls — calls above spot prices — to generate income on existing holdings. Other strategies include selling puts for yield, buying puts for downside protection, and purchasing calls to maintain upside exposure.
STS Digital said these techniques are now increasingly applied to altcoins, driven in part by market stress events such as the October 10 selloff, when forced liquidations and auto-deleveraging amplified losses.
“Institutions are using put selling for yield, downside hedging, and call buying to gain upside with defined risk,” Seiler said. “Applying these strategies to altcoins helps manage exposure without the forced liquidation risks seen in October.”
STS Digital, a regulated trading firm and principal dealer, provides liquidity across options, spot markets, and structured products for over 400 cryptocurrencies, settling billions in altcoin options annually through bilateral trades.
While centralized platforms like Deribit focus on major tokens such as bitcoin and ether, STS Digital’s broad coverage meets growing institutional demand for altcoin options.
Seiler expects options adoption across bitcoin and altcoins to continue rising as institutions increasingly view derivatives as the preferred tool for managing digital asset exposure.
“Periods of consolidation and low volatility are increasingly seen as attractive entry points ahead of the next wave of market catalysts,” he added.
