Options traders are increasing their bets that Bitcoin will hit a record $80,000 by the end of November regardless of who wins the U.S. presidential election.
Imposed volatility on Bitcoin options set to expire on Election Day on Nov. 5 has risen, with bets skewed toward call options that give buyers the right to buy the cryptocurrency at new highs.
“I think the market expects Bitcoin to do well regardless of the outcome of the election,” said David Lawant, head of research at cryptocurrency broker FalconX. “Our analysis shows that options activity around the upcoming election is showing a significant bullish bias.”
The ratio of puts to calls is trending down toward the end of the year, with more traders buying calls than puttings, according to data compiled by the largest cryptocurrency options exchange Deribit.
“We’re seeing traders buying puts near 68K and puttings near 66K, so a lot of them are constantly rebuilding positions in anticipation of a move in either direction,” said Eve Feldman, co-founder of SwapGlobal, which provides derivatives like swaps and options to cryptocurrency investors in the U.S. “We don’t see a good reason for the market to go lower after the election, so a move higher makes more sense.”
Open positions, the total amount of outstanding contracts, for call contracts expiring Nov. 29 are concentrated around $80,000, with the second most common strike price at $70,000. Open positions for call contracts expiring Dec. 27 are spread between $100,000 and $80,000, while the most common strike price for call contracts expiring Nov. 8 is $75,000, the data shows.
