Options traders are increasingly betting that Bitcoin will hit a record $80,000 by the end of November, independent of the results of the US presidential election.
Implied volatility for Bitcoin options expiring around November 5—election day—is heightened, with a preference for call options that allow buyers to purchase the cryptocurrency at new highs. David Lawant, head of research at FalconX, stated,
“The prevailing sentiment seems to be that Bitcoin is expected to perform positively, regardless of the election outcome.”
Former President Donald Trump, known for his pro-crypto stance, is viewed as a catalyst for Bitcoin’s potential rise. In contrast, Democratic Vice President Kamala Harris has promised support for a regulatory framework, differing from the stricter measures of the previous administration. Anticipated interest rate cuts by the Federal Reserve are also boosting market sentiment.
Testing $70,000
Bitcoin previously reached an all-time high of $73,798 in March, driven by excitement around newly launched exchange-traded funds. Earlier this week, it approached $70,000 before retracting; as of Wednesday morning, it was trading at $67,100, up about 60% this year.
Data from Deribit shows a declining put-to-call ratio as the year ends, with more traders favoring call options. Yev Feldman, co-founder of SwapGlobal, noted that traders are positioning themselves for potential breakout moves in either direction.
The open interest for call contracts expiring on November 29 is heavily concentrated around $80,000, while those expiring on December 27 are clustered around $100,000 and $80,000.
Higher Premiums
Call options are commanding higher premiums than puts, indicating that investors are using the options market to capture potential upside rather than to hedge against risks. Lawant highlighted a divide in opinions regarding non-Bitcoin crypto assets, with less consensus on their performance in different electoral scenarios.
Pre- and post-election volatility has remained muted compared to significant events like ETF launches, though this could change as the election approaches, according to Lawant.
Disclaimer: This content does not constitute trading or investment recommendations. It’s essential to conduct your own research before purchasing any cryptocurrency or investing in any services.
