The Bulls Strike Back? Bitcoin Traders Are Betting On $80,000 Peak By November's End
2min read Bitcoin options traders have their sights set on the $80,000 mark.
Traders reportedly are ramping up bets that regardless of the outcome of the U.S. presidential election, Bitcoin will hit a historic new high of $80,000 by the end of November.
The implied volatility of Bitcoin options expiring around November 5th, the Election Day, is high, and the bets are skewed towards call options, which give the buyer the right to purchase the cryptocurrency at a higher price.
David Lawant, head of research at cryptocurrency market maker FalconX, said, I believe the market consensus is that Bitcoin is likely to perform well regardless of the election outcome. Our analysis shows that options activity surrounding the upcoming elections exhibits a notable topside-heavy bias.
Republican candidate and former President Trump has openly supported cryptocurrencies, to the extent that Bitcoin is seen as a so-called Trump trade. His Democratic opponent, current Vice President Harris, has promised to support a regulatory framework for the industry, contrasting with the Biden administration's crackdown on the sector. Non-political factors such as further rate cuts by the Federal Reserve are seen as fueling optimism.
Bitcoin set a record high of $73,798 in March, due to the launch of a spot Bitcoin ETF in the United States, which drove market demand for the digital currency, but the bull market for Bitcoin has since cooled.
Earlier this week, the largest cryptocurrency approached $70,000 before retreating. The token has risen about 61% this year.
According to data compiled by Deribit, the largest crypto options exchange, the ratio of Bitcoin put options to call options is trending downward by year-end, with more traders buying call options than put options.
Yev Feldman, co-founder of SwapGlobal, which offers derivatives such as swaps and options to U.S. digital asset investors, said, We see traders buying call options near $68,000 and put options near $66,000. In other words, many people are continuously adjusting their positions for further breakouts on both ends of Bitcoin. However, there is limited justification for a significant drop in Bitcoin after the U.S. presidential election, so betting on a rise makes more sense.
Data shows that open contracts for call options expiring on November 29th are concentrated around the $80,000 mark, with the second most popular strike price at $70,000. Data indicates that open contracts for call options expiring on December 27th are concentrated around $100,000 and $80,000, while the most popular strike price for call options expiring on November 8th is $75,000.
Additionally, the premium for Bitcoin call options over put options is also relatively high. Jake Ostrovskis, an over-the-counter trader at Wintermute, wrote in a report on Monday that at a higher level, options traders have driven the call option premium for contracts expiring in more than a day.
Lawant said, This indicates that investors are leveraging the options market more as a tool for capturing potential upside rather than as a hedge against downside risks. For non-Bitcoin crypto assets, I see opinions more divided. The market shows less consensus on how these alternative cryptocurrencies might perform under different electoral scenarios.
Lawant said that, unlike other major events such as the launch of spot Bitcoin ETFs and halving, Bitcoin's volatility is generally lower before and after elections, but it may change as Election Day approaches.
