Institutional traders are showing a bullish outlook on Bitcoin, predicting a surge to $79,300 by the end of November. This optimism is evidenced by the recent surge in trading activities on the Chicago Mercantile Exchange (CME), where Bitcoin options have been experiencing unprecedented trading volumes as the US presidential election approaches.
Will Bitcoin Surge Above $79,300?
Joshua Lim, the co-founder of Arbelos Markets—a firm specializing in providing liquidity across cryptocurrency derivatives markets—recently shared insights on platform X about these significant trades. “CME Bitcoin options just experienced some of its largest volume days ever, ahead of the US election,” Lim highlighted.
Notable Trades and Their Implications
Lim discussed two major transactions that occurred recently. On October 25, traders bought 1,875 Bitcoin units of the November 29 $70,000 strike calls. In options trading, a call option provides the buyer the right, but not the obligation, to purchase an asset at a specified strike price before the option’s expiration date. Here, the $70,000 strike price suggests that buyers are betting on Bitcoin surpassing this price by the end of November.
According to Lim, “At the time of the trade, $8.3 million of premium was paid, $147,000 of vega, and $65 million of delta.” On October 29, another significant transaction took place involving the purchase of 3,050 Bitcoin units of the November 29 $85,000 strike calls, with $4.6 million of premium paid, $173,000 of vega, and $42 million of delta recorded.
Investment Confidence and Market Volatility
The substantial premiums of $8.3 million and $4.6 million demonstrate strong investment confidence, indicating a belief in Bitcoin’s potential to rise. The high vega suggests that traders anticipate significant volatility, especially around the time of the US election. Delta, which reflects how the option’s price is expected to change with a $1 change in the underlying asset’s price, shows high values of $65 million and $42 million, implying significant exposure to Bitcoin’s price movements.
The cumulative notional value of these positions—the total value of the underlying assets represented by the options—approximates $350 million. Lim remarked that this is “large even in the context of Deribit,” the world’s largest crypto options exchange.
Breaking the $79,300 Mark
For the traders to start profiting from these positions, Bitcoin’s price needs to exceed the $79,300 mark by the option’s expiry date. This price point represents about a 16% increase from Bitcoin’s price at the time these trades were executed. “Very bullish positioning into the election, and great to see institutions sizing up like this on CME,” Lim commented, adding that it could be a positive sign of growing liquidity in the crypto derivatives markets as the asset class continues to mature.
The US Election and Market Impact
The timing of these trades is crucial. With the US presidential election on the horizon, market volatility is expected to rise, potentially affecting the entire Bitcoin and cryptocurrency market. Many experts believe that a Trump victory could be bullish for Bitcoin’s price.
As of the latest data, Bitcoin was trading at $72,382, a figure closely watched by investors and analysts alike.
