With the US presidential election just around the corner, there is a palpable buzz within the crypto community. Many enthusiasts and traders are keenly observing how the election’s outcome might sway Bitcoin prices. As the countdown narrows down to just 15 days before the showdown between former President Donald Trump and Vice President Kamala Harris, optimism is soaring among options traders about Bitcoin hitting a new all-time high, regardless of who claims the presidency.
Traders Favor Call Options Ahead Of US Election
Recent insights from Bloomberg suggest that options traders are heavily betting on Bitcoin reaching a historic peak of $80,000 by November’s end. A notable aspect of this scenario is the elevated implied volatility for Bitcoin options, especially those maturing around the election period. There is a discernible preference for call options, which empower the buyer to acquire BTC at these elevated price points.
Expert Opinions and Market Sentiment
David Lawant, leading research at crypto prime broker FalconX, shared his perspective, stating, “I believe the market consensus is that Bitcoin is likely to perform well regardless of the election outcome.” His analysis underscores a clear inclination towards a bullish trajectory in options activity as the election approaches.
The political backdrop presents varied stances on the emerging cryptocurrency landscape. Trump, having voiced strong support for digital assets recently, is often seen as a pro-crypto choice, leading to Bitcoin being dubbed a “Trump trade.” Conversely, Harris has expressed intentions to establish a regulatory framework for cryptocurrencies, marking a departure from the stringent oversight during the Biden administration, marked by ongoing enforcement actions and legal challenges against key industry players.
Beyond politics, traders are also weighing non-political elements such as potential Federal Reserve rate cuts and persistent inflation concerns, which contribute to a generally positive sentiment in the market.
Data Reveals Strong Demand For $80,000 Bitcoin Calls
Data sourced from Deribit, a leading crypto options exchange, highlights a declining put-to-call ratio, signaling that more traders are leaning towards buying call options instead of puts as the year draws to a close.
Current Trading Patterns and Market Dynamics
Yev Feldman, co-founder of SwapGlobal, shared insights on prevailing trading patterns, noting, “We are seeing traders buying calls near $68,000 and puts near $66,000, suggesting that many are positioning for a breakout in either direction.” Feldman also mentioned that there is limited anticipation of a downward collapse post-election, making an upward surge seem more plausible for the market-leading cryptocurrency.
Open interest data further reveals that call contracts set to expire on November 29 are densely focused around the $80,000 mark, with another significant concentration at $70,000. For contracts expiring on December 27, interest clusters around $100,000 and $80,000, while the preferred strike price for calls expiring on November 8 is $75,000.
Options Market Trends and Investor Strategies
Interestingly, call options are attracting higher premiums compared to their put counterparts, as observed from the skew term structure, which mirrors pricing dynamics between these options. “This suggests that investors are utilizing the options market more as a tool for capturing potential upside rather than as a hedge against downside risks,” Lawant elucidated.
Lawant also highlighted that opinions remain divided on non-Bitcoin cryptocurrencies, with less consensus on their performance under various electoral scenarios.
