Hendrik Ghys – Escape the Volatility Tax: Stack More BTC Through Options

Most Bitcoin hodlers think volatility is just something you endure. At BTC Prague, I argued the opposite — that volatility is something you can actually use to stack more BTC over time, without ever selling your core position, by using put options in a counterintuitive but powerful way.

The Coin Toss Problem Every Hodler Faces

Let me start with a game. Imagine a coin toss where heads pays you 50 cents on the dollar and tails costs you 40 cents. You have a 5% edge every single round. You should play, right? But here’s the trap: if you reinvest your full wealth each round, most players end up losing everything. The average goes up, but the median goes down. A few lucky players amass fortunes while most lose nearly all they have.

The problem isn’t the edge disappearing. The problem is the game is too volatile. Buying and holding Bitcoin works exactly the same way — every day is like a coin toss with a positive drift, but the higher the volatility, the less the average hodler actually gains over time.

Kelly Sizing and the Volatility Tax

The solution in the coin toss game is to play conservatively — bet only 25% of your wealth per round, keep the rest in cash. This concept is known as Kelly sizing: optimizing your position size based on odds and volatility. When you do that, the median and the average start tracking together and wealth grows steadily.

But for a Bitcoin hodler, this creates a dilemma. Keeping cash on the side means suffering inflation. Trading in and out means relying on skill you may not have. Neither feels right. That’s exactly where put options come in.

Puts Are Not Just Insurance — They’re Your Midfield

Put options are typically seen as bearish bets. But I want to reframe them entirely. Think of a put option like having Kevin De Bruyne in your midfield. He intercepts the ball, launches the counterattack, and suddenly your attackers get more shots on goal. The real value of puts isn’t their standalone expected payoff — it’s the timing of when they pay off. They generate cash precisely when Bitcoin dips, giving you firepower to buy more at the bottom.

Yes, puts cost a premium. Market makers price them slightly too expensive — this is called the volatility risk premium. As long as implied volatility is reasonable (around 40% is currently a fair level), that overpayment is worth it. Because when you take that cash from a dip and reinvest it into Bitcoin, and Bitcoin eventually recovers, that extra BTC accumulated at the bottom is where you make your real return.

Real Results: 20% More Bitcoin in Six Months

I ran this strategy myself since the start of the year. By rolling forward put options and reinvesting the daily P&L settlements into Bitcoin every time the balance exceeded a threshold, I was able to accumulate 20% more Bitcoin over six months compared to a simple buy-and-hold. The sharp dip to 87K in early March was particularly powerful — the puts generated meaningful cash right at the bottom.

You can also extend this by selling upside calls to fund the puts — a strategy pension funds use in equity markets all the time. In a bull market when call premiums are expensive, you can build a premium-neutral collar: sell calls, buy puts, get the downside protection effectively for free.

How We’ve Built This at TX

At TX, our options exchange, we’ve built the infrastructure to make all of this accessible. You post Bitcoin as collateral, open put positions against it, and your daily P&L settles automatically in your account — no need to manually sell options to capture profits. We also support combination trades like spreads and collars executed in a single transaction, with portfolio-level margin calculations rather than position-by-position.