As the U.S. elections approach, institutional investors are positioning for Bitcoin price volatility, indicated by increased call option trading and borrowing activities. Over $350 million in November call options have been traded at a breakeven price of around $79,300, with institutions preparing for potential price increases.

Institutional investors are increasingly preparing for significant Bitcoin price volatility as the U.S. elections approach. According to Joshua Lim of Arbelos Markets, there has been a notable increase in call option purchases on CME bitcoin futures, indicating a bullish outlook among these investors. With over $350 million in November call options traded recently, the breakeven price for these contracts is near $79,300, suggesting that traders expect Bitcoin prices to rise next month. Furthermore, the crypto credit markets are exhibiting heightened activity, as noted by Sidney Powell, co-founder of Maple Finance. There is a surge in borrowing requests from larger institutions, anticipating potential price fluctuations tied to the election. These organizations, primarily prime brokerages and over-the-counter desks, are potentially increasing their inventory to cater to margin demands or preparing for a leverage-based long position in light of an anticipated bullish market. The options market’s escalating activity underscores a strategic positioning among institutional players ahead of the elections, aligning with the maturation and growing acceptance of cryptocurrency as an asset class. Lim emphasizes this trend, asserting that the funds committed to crypto strategies are expanding markedly.

As the U.S. elections loom, they are perceived as a significant catalyst for various markets, including cryptocurrencies. Institutional investors, known for their cautious yet strategic approaches, are positioning themselves for potential volatility in Bitcoin prices, which can often be exacerbated by major political events. The recent uptick in call option trading and increased borrowing activities reflects a growing confidence in Bitcoin’s upside potential as these institutions navigate the complex landscape leading into the election.

In summary, institutional investors are actively positioning for the anticipated Bitcoin volatility surrounding the upcoming U.S. elections. The marked increase in call options trading on the CME and the rise in borrowing from crypto lending markets indicate a strong belief in potential price gains. This proactive stance highlights the maturation of institutional interest in cryptocurrency, underscoring a growing confidence in its long-term viability as an investment asset.

Original Source: www.coindesk.com

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