Bitcoin has reached a new all-time high at $81,360, boosted by a wave of victories by pro-crypto candidates in the recent US presidential election.
This bullish trend in the world’s largest Cryptocurrency has caused a significant increase in futures and options contracts, reflecting investor optimism about the future of the crypto sector in the current political context.
Bitcoin price evolution in the last 24 hours. Source: CoinMarketCap
Rising Premiums in Bitcoin Futures
Open interest in Bitcoin options contracts, targeting a price above $90,000, exceeded $2.8 billion on the Deribit platform, one of the leading crypto derivatives exchanges.
According to Vetle Lunde, head of research at K33 Research, “options market preference is heavily weighted toward continued momentum.” Lunde noted that call option contracts are trading at a higher price than put options, indicating expectations of further increases.
The rise in premiums is most notable on the CME derivatives exchange, where premiums on Bitcoin and Ethereum futures contracts reached 14% on average after the election, doubling the previous average of 7%. Lunde stressed that “this recent increase is a significant deviation, emphasizing the upward flows that have been seen since electoral clarity.”
Trump administration commitments to crypto
During his campaign, President-elect Donald Trump promised to transform the United States into the “crypto capital of the planet.” Among his promises, he mentioned the creation of a national reserve of crypto assets, using the more than $16 billion in Bitcoin seized by the US government.
Additionally, he proposed reducing interest rates, a measure that has historically benefited cryptocurrency markets by lowering the cost of money.
The Federal Reserve, charged with defining the country’s monetary policy, recently approved a consecutive cut in the benchmark interest rate, a measure that aligns with the administration’s desire to foster a favorable economic environment for cryptocurrencies.
Performance of crypto stocks in the market
The victory of candidates supported by the crypto industry has also benefited companies in the fintech sector. Coinbase, one of the largest crypto companies in the US, saw its shares rise 48% this week, its strongest performance since January 2023.
The company was one of the largest corporate donors during the election cycle, contributing more than $75 million to Fairshake and its affiliated PACs.
Robinhood, another platform that allows its users to buy and sell cryptocurrencies, rose 27% on the week. Johann Kerbrat, vice president of Robinhood’s crypto unit, expressed his commitment to collaborating with the new administration’s regulators to guide policymakers in understanding and regulating the crypto market.
Towards a pro-crypto Congress
Coinbase and other players in the sector expect a more favorable stance from Congress towards cryptocurrencies with the new mandate. The possible removal of Gary Gensler, SEC chairman and industry critic, could also smooth the way for companies like Coinbase, which face charges for alleged securities violations.
According to Paul Grewal, head of legal affairs at Coinbase, “we are going to have the most pro-crypto Congress in history, and Coinbase has played a major role in this.”
The combination of these factors – a favorable administration, new policies and a pro-crypto Congress – is opening the doors to a promising future for Bitcoin and the crypto sector in general.
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