(Bloomberg) — Options traders are increasing bets that Bitcoin (BTC-USD) will reach a record high of $80,000 by the top of November irrespective of who wins the US presidential election.
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The implied volatility for Bitcoin options coming due across the Nov. 5 election day is elevated, with the wagers skewed toward call options that give the client the proper to purchase the cryptocurrency at latest highs.
“I feel the market consensus is that Bitcoin is more likely to perform well whatever the election consequence,” said David Lawant, head of research at crypto prime broker FalconX. “Our evaluation shows that options activity surrounding the upcoming elections exhibits a notable topside-heavy bias.”
Republican candidate and former President Donald Trump is avowedly pro-crypto, a lot in order that Bitcoin is viewed as a so-called Trump trade. Democratic rival Vice President Kamala Harris has vowed to support a regulatory framework for the industry. That contrasts with a crackdown on the sector under the Biden administration. Non-political aspects reminiscent of further rate cuts by the Federal Reserve are seen contributing to the optimism.
Testing $70,000
Bitcoin reached an all-time high of $73,798 in March amid optimism about demand for dedicated exchange-traded funds that launched within the US this yr. The bull run subsequently moderated.
The biggest cryptocurrency got here near $70,000 in the beginning of the week before dropping back. The token, which has jumped about 60% this yr, modified hands at $67,100 as of 6:03 a.m. in London on Wednesday.
The put-to-call ratio is trending lower toward the top of the yr, with more traders buying call options than puts, in line with data compiled by the most important crypto options exchange Deribit.
“We see traders buy calls near 68k and puts near 66k, in other words, many repeatedly position and reposition for a breakout for either end,” said Yev Feldman, co-founder at SwapGlobal, which provides derivatives reminiscent of swaps and options, to the US digital-asset investors. “There is restricted reason to collapse downwards after the election, so up makes more sense.”
The open interest, which is the full amount of outstanding contracts, for the decision contracts expiring on Nov. 29 is concentrated around $80,000 with the second hottest strike price at $70,000. The open interest for the calls expiring on Dec. 27 is clustered around $100,000 and $80,000, while the preferred strike price of the calls expiring on Nov. 8 is at $75,000, the info shows.
