Bitcoin Options Traders Bet on $80,000 Breakthrough After Election: Market Optimism High

Bitcoin Options Traders Bet on $80,000 Breakthrough After Election: Market Optimism HighBitcoin options traders are increasing their bets that the cryptocurrency will reach a new all-time high of $80,000 by the end of November, regardless of who wins the upcoming US presidential election. With Election Day approaching, implied volatility in Bitcoin options remains elevated, and traders are leaning toward buying call options, which give them the right to buy Bitcoin at a higher price

Bitcoin Options Traders Bet on $80,000 Breakthrough After Election: Market Optimism High

Bitcoin options traders are increasing their bets that the cryptocurrency will reach a new all-time high of $80,000 by the end of November, regardless of who wins the upcoming US presidential election. With Election Day approaching, implied volatility in Bitcoin options remains elevated, and traders are leaning toward buying call options, which give them the right to buy Bitcoin at a higher price.

"I believe the market consensus is that Bitcoin is likely to perform well regardless of the election outcome," said David Lawant, Head of Research at cryptocurrency prime broker FalconX. "Our analysis shows that options activity surrounding the upcoming election exhibits a clear upward bias."

Data shows that open interest in call options expiring on November 29 is concentrated around the $80,000 strike price, indicating that traders expect Bitcoin to break through that level by the end of November.

This optimism stems from several factors, including:

• Political Factors: Republican candidate former President Trump is a vocal supporter of cryptocurrencies, calling Bitcoin a "Trump trade." Democratic rival Vice President Harris has expressed her support for establishing a regulatory framework for the industry. In contrast, the Biden administration's crackdown on the industry presents a stark contrast to the stances of the two aforementioned candidates, adding uncertainty to the future of Bitcoin.

• Non-Political Factors: Further interest rate cuts by the Federal Reserve and factors like inflation have also contributed to the market's bullish sentiment towards Bitcoin. In March, Bitcoin reached an all-time high of $73,797 after a multi-week surge as investors were optimistic that demand from Bitcoin ETF issuance this year would outstrip supply.

• Technical Factors: Following its all-time high in March, Bitcoin retreated over 30% by early August before launching the current bull run. The largest cryptocurrency briefly rose to $69,474 on Monday before retreating to around $66,800. The last time Bitcoin reached $70,000 was on June 12, and it has gained about 60% year-to-date.

Data compiled by Deribit, the largest cryptocurrency options exchange, shows that the ratio of put options to call options has been declining as the year-end approaches, with traders buying more call options than put options.

"We see traders buying calls around $68,000 and puts near $66,000, which means that many continue to build or adjust their positions in anticipation of a breakout in either direction," said Yev Feldman, co-founder of SwapGlobal, which provides derivatives like swaps and options to US digital asset investors. "There are limited reasons to see a decline after the election, so an upside scenario is more realistic."

In addition to the concentration of call options expiring on November 29 around the $80,000 strike price, data shows that open interest in call options expiring on December 27 is concentrated around the $100,000 and $80,000 strike prices, and the most popular call options expiring on November 8 are those with a $75,000 strike price.

Overall, Bitcoin options traders are bullish on the cryptocurrency's performance after the election, expecting it to break through $80,000 and potentially reach new all-time highs by the end of November. This optimism stems from political, non-political, and technical factors. However, it's crucial to remember that there is uncertainty in the market and Bitcoin's price is highly volatile, so investors should invest cautiously.

(This article is based on information from Jinrongjie)