Bitcoin Options Traders Set Sights On $80,000 By November-End, Regardless Of US Election Outcome

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As a seasoned researcher with years of experience tracking the crypto market, I find myself intrigued by the current buzz surrounding Bitcoin and the upcoming US presidential election. The optimism among options traders is palpable, with many betting on a new all-time high for BTC before the month ends.

As the U.S. presidential election nears, there’s a lot of chatter among cryptocurrency enthusiasts about how the final result might impact Bitcoin‘s value.

As we approach the final countdown to the presidential election, with only 15 days remaining, I’ve noticed an intriguing trend among options traders: they are growing more and more hopeful that Bitcoin will reach a brand-new all-time high, irrespective of whether former President Donald Trump or Vice President Kamala Harris takes office.

Traders Favor Call Options Ahead Of US Election

Based on a recent Bloomberg report, it appears that options traders are confidently wagering that the price of Bitcoin could hit an all-time peak of $80,000 before November draws to a close.

Significantly, the implied volatility of Bitcoin option contracts, especially those set to expire near the election date, continues to run high. It seems more traders are opting for call options, providing the holder with an opportunity to purchase Bitcoin at record-breaking prices.

David Lawant, who leads research at crypto prime broker FalconX, stated his view that it’s widely expected in the market that Bitcoin will probably thrive irrespective of the election results. His examination suggests that options trading related to the upcoming elections indicates a clear preference for positive returns.

In simpler terms, the political environment shows a wide range of opinions about the emerging world of cryptocurrencies. Recently, Trump has been a strong supporter of digital currencies and is seen by many as an advocate for them, which has led some to refer to Bitcoin as a “Trump investment.

Instead, Harris plans to advocate for a flexible regulatory system for cryptocurrencies, marking a change from the rigorous supervision under the Biden administration, which was known for persistent enforcement measures and legal battles with major figures in the industry.

According to the data, besides political aspects, traders are taking into account other elements like possible interest rate reductions by the Federal Reserve (Fed) and persistent worries about inflation, all of which help foster an overall positive outlook.

Data Reveals Strong Demand For $80,000 Bitcoin Calls 

As a researcher examining data, I’ve observed a decreasing trend in the put-to-call ratio from Deribit, a renowned crypto options exchange. This shift suggests that an increasing number of traders are opting for call options over put options as the year comes to a close, indicating a bullish sentiment towards the crypto market.

According to Yev Feldman, the co-founder of SwapGlobal, there is a noticeable pattern among investors when it comes to trading Bitcoin. Specifically, they’re buying call options close to $68,000 and put options near $66,000. This indicates that many traders are preparing for a significant price movement in either direction from the current level.

Feldman also pointed out that it’s not likely we’ll see a significant drop in prices following the election, instead suggesting an upward trend could be more probable for the top cryptocurrency on the market.

Data on open positions indicates a strong focus on the $80,000 level for options due to expire on November 29, while the second most preferred strike price is found at $70,000. In simpler terms, most traders are betting heavily around the $80,000 mark and the next most frequent bet is at the $70,000 level for options expiring in late November.

Contracts that end on December 27 have a concentration of interest at approximately $100,000 and around $80,000, whereas the preferred exercise price for options expiring on November 8 is generally $75,000.

It’s interesting to note that call options are currently priced higher than their corresponding put options, as suggested by the skew term structure, a term that refers to the variation in pricing between these two types of options.

According to Lawant, this suggests that investors are increasingly using the options market to seize potential profits (i.e., upside), rather than as a means of protecting themselves from possible losses (i.e., downside risks).

The researcher also pointed out that opinions on non-Bitcoin cryptocurrencies remain divided, with less consensus on how these assets might perform under varying electoral scenarios.

At the time of writing, BTC was trading at $67,370. 

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2024-10-23 08:46