While institutional investors drove the recovery in 2025, they opted for different strategies heading into 2026.
As a result, institutional investors are increasingly turning to altcoin options.
According to CoinDesk, crypto derivatives trading firm STS Digital said institutional investors’ options strategies are changing.
According to STS Digital, institutional investors are increasingly extending their options strategies, previously used primarily for Bitcoin, to the altcoin market in order to manage price volatility and generate additional returns.
The company 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, said: “Our clientele includes token projects and foundations, investors with large amounts of assets, and asset management firms that manage risk ahead of liquidity events. Increasingly, we see these participants applying options strategies historically used in Bitcoin to the altcoin space.”
Among the strategies institutions choose are covered calls, which involve selling a corresponding call option while purchasing an asset.
Other strategies include selling puts to bet against big declines, hedging downside risk, and buying calls to prepare for a potential rise.
According to STS Digital, investors adopt 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 does not constitute investment advice.
