The “quadruple witching” process, which occurs every quarter in global markets and where trillions of dollars of derivative contracts expire at the same time, is on the agenda again this week. In this event, which takes place on the third Friday of March, June, September and December, stock index futures, index options, individual stock options and individual stock futures reach expiration at the same time.
Simultaneous Termination of Derivative Contracts
During this intense expiry period, transaction volumes can increase significantly as investors are forced to close, transfer or settle their positions. This situation can lead to increased price fluctuations, especially in short time periods. The expiration of approximately 4.7 trillion dollars of derivative contracts in March 2025 revealed the scale of the activity in the markets.
Large-scale expirations often cause institutional investors to rebalance their portfolios, adjust risk positions and unwind hedges. While a significant part of the transactions are concentrated in the last hour of the session, sudden jumps in volatility can be seen with the increase in liquidity.
Current Tension in Markets and Its Effects
This quarter’s expiration coincides with an already volatile market environment. While tensions in the Middle East pushed the oil price to $120, gold fell below $4,600. Bitcoin fell below $69,000. In the same period, the volatility index VIX rose above 35 and reached its highest level in the last year.
Such movements, which start in traditional markets, can also be reflected in crypto markets, which are traded with more and more risk assets. It is considered that sharp fluctuations in stocks may similarly have a chain effect on digital asset prices.
Possible Impacts on Crypto Markets and Bitcoin
Cole Kennelly, CEO of Volmex Finance, pointed out that such periods can increase volatility in crypto markets. Kennelly shared the following assessment, stating that the expiry of large derivative positions could trigger volatility among different asset classes:
The process of quadruple witching can lead to an increase in cross-asset volatility. It is observed that this effect has started to be seen on the crypto side as well and Bitcoin volatility indicators are in an upward trend.
When the data for 2025 is examined, it is seen that the Bitcoin price moves limitedly in the expiration days, but there are more significant decreases in the following days. While prices moved downwards in a short time in March, June and September, a limited increase was recorded in December, but the general trend remained weak.
On the other hand, there is another important development for crypto markets. Approximately $13.5 billion worth of crypto derivative contracts will expire on March 27. In this process, investors seem to be turning to volatility strategies rather than direction expectations.
