Bitcoin Options Traders Prepare for Price Surge in Wake of U.S. Election
In anticipation of the U.S. presidential election, Bitcoin options traders are purchasing a significant volume of post-election call options, particularly at strike prices between $70,000 and $80,000. This trend coincides with Donald Trump’s growing lead over Vice President Kamala Harris in decentralized betting markets, indicating an expected bullish shift in Bitcoin prices following the election. Analysts note these moves demonstrate confidence in Bitcoin as an asset that responds dynamically to political events and broader market volatility.
Bitcoin options traders are demonstrating an increasing inclination to acquire call options with expiry dates following the upcoming U.S. presidential election, particularly targeting strike prices in the range of $70,000 to $80,000. According to Joshua Lim, CEO of Arbelos Markets, this strategic purchase aligns with heightened expectations for a price escalation in the cryptocurrency market after the election, which is scheduled for November 5. Observations indicate a trend where traders are engaging in systematic selling of month-end options while simultaneously looking to capitalize on potentially undervalued post-election call options. Mr. Lim noted, “There’s been a combination of month-end systematic selling by yield-seekers and a ‘steepening’ bias to buy post-election call options cheapened by selling pre-election options.” This reflects an anticipated bullish sentiment towards Bitcoin’s price trajectory amidst prevailing global uncertainties. Lim further commented on the dynamics of the options market, indicating, “I see a surge in call buying of strikes in the $70,000-$80,000 range and selling of $100,000 plus as the expectation is for implied volatility to come in once the election resolves.” In the broader context, the cryptocurrency Bitcoin is increasingly perceived as both a hedge against inflation and a reflective proxy of the U.S. presidential election, especially if Donald Trump were to emerge victorious. Lim elaborated that the options market is forecasting a 7% price movement on the election day, stating, “which feels a touch low relative to Bitcoin’s beta to risk assets.” As the election date approaches, Donald Trump’s lead appears to be growing over Vice President Kamala Harris in decentralized betting markets such as Polymarket, where Trump currently has a 60.3% chance of winning, in contrast to Harris’s 39.6%. This shift in market dynamics is integral to the observed increase in call options as traders pivot towards expectations of Bitcoin price appreciation in the post-election phase. At present, Bitcoin is trading at approximately $67,500, and the global cryptocurrency market capitalization stands at $2.42 trillion, reflecting a minor 0.2% decrease within the last 24 hours, as indicated by Coinglass data.
The article discusses the current positioning of Bitcoin options traders in anticipation of the U.S. presidential election, highlighting an increase in the purchase of call options aimed at profiting from a potential rise in Bitcoin’s price immediately following the election results. With the election set for November 5, and Donald Trump appearing to gain momentum against Vice President Kamala Harris in betting markets, the sentiment appears bullish among traders. Such a focus on Bitcoin as a financial instrument reflects its dual role as a hedge against inflation and a barometer for political outcomes, especially in the context of a Trump presidency. The volatility forecast suggests traders are preparing for significant market movements, contingent on the results of the election.
In conclusion, Bitcoin options traders are strategically positioning themselves for potential gains following the U.S. presidential election by acquiring call options in specific strike price ranges. As Donald Trump solidifies his lead in betting markets, the sentiment among traders suggests an optimistic outlook on Bitcoin’s price trajectory in the aftermath of the election. With the cryptocurrency market currently exhibiting modest fluctuations, the implications of the election results could alter the dynamics significantly, reflecting traders’ expectations of increased volatility and price movement.
Original Source: www.theblock.co
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