Options traders have raised their expectations for the price of Bitcoin (BTC), anticipating that the digital currency will hit an all-time high of $80,000 by the end of November, regardless of who wins the US presidential election.
According to data seen on Deribit, which is the largest derivatives exchange in the world, the implied volatility of BTC options expiring around November 5 shows a clear trend towards buying optionsindicating that the market is betting on a significant increase in the price of BTC.
David Lawant, head of research at FalconX, declared to Bloomberg: “I think the market consensus is that bitcoin is likely to perform well regardless of the election outcome. “Our analysis shows that options activity around the upcoming election exhibits a notable upward bias.”
This analysis is reflected in open interest, where the number of outstanding contracts for call options It is concentrated around USD 80,000 for contracts that expire on November 29.
It must be remembered that options influence the price of bitcoin because they allow traders speculate on its future value without owning itreflecting market expectations. Call options can increase demand and price, while implied volatility and open interest add liquidity and speculation. Additionally, market makers adjust their positions in the spot market to cover their exposures, directly affecting the price.
Wintermute over-the-counter trader Jake Ostrovskis also notes that call option premiums are relatively higher, suggesting that investors are more interested in profiting from a rise in price than protecting against declines.
“This indicates that investors are leveraging the options market more as a tool to capture potential upside than as a hedge against downside risks,” Lawant added.
Buy options far exceed put options. Source: Deribit/Bloomberg.
According to Yev Feldman, co-founder of SwapGlobal, “we see traders buying call options near $68,000 and put options near $66,000.
“In other words, many are continually positioning and repositioning themselves for a breakout at either extreme. There is limited reason to collapse to the downside after the elections, so going up makes more sense,” he explained.
Elections and bitcoin
The United States presidential elections, scheduled for November 5, have had cryptocurrencies as a relevant issue. Republican candidate Donald Trump has shown an open stance towards these assets, even launching a DeFi platform, while Democratic candidate Kamala Harris has promised greater investment and regulation of the sector favorable for African Americans.
Despite political positions, analysts such as those at Standard Chartered believe that bitcoin will break all-time highs Whoever wins, as reported by CriptoNoticias. However, there are divergences, with analysts at Bernstein suggesting that BTC could only reach $90,000 if Trump wins, or USD 40,000 if Harris does it.
Be that as it may, the importance of options in the price of bitcoin is evident in the trend of traders towards the end of this year, where the purchase of call options exceeds that of put, according to Deribit data.
Recently, the expiration of 11,000 options of BTC pushed the price towards USD 70,000, with greater buying pressure than selling, as reported by CriptoNoticias. Added to this is the fact that an increase in interest in call options is foreseeable, considering that the United States Securities and Exchange Commission (SEC) recently authorized the bitcoin ETF options trading from several companies, including giants like BlackRock with its iShares Bitcoin Trust (IBIT).
This decision, which came after months of waiting and a legal process that even questioned the arbitrariness of the SEC in its previous denial, marks a milestone in the recognition and regulation of financial products linked to BTC in the United States.
The SEC’s approval of bitcoin ETF options not only allows investors to manage risks and opportunities in the Cryptocurrency market in a more regulated manner, but also attracts greater liquidity to the market, something crucial to capture the attention of institutional investors.
This article was created using artificial intelligence and edited by a human Editor.
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