- Bitcoin is poised to hit an all-time high of $80,000 by the end of November, driven by a surge in call options, despite the US election results.
- The approval of Bitcoin ETF options by the SEC has amplified market interest and liquidity, supporting Bitcoin’s bullish trajectory.
As the US presidential election approaches on November 5, Bitcoin (BTC) is set to take center stage. Options traders have significantly increased their bullish outlook on Bitcoin, predicting that the cryptocurrency could hit $80,000 by the end of November. Regardless of who wins the election, market signals suggest Bitcoin is on a clear upward trajectory, thanks to heightened volatility and strategic positioning by institutional investors.
According to data from Deribit, the world’s largest cryptocurrency derivatives exchange, the implied volatility of BTC options set to expire around November 5 has risen sharply. This trend indicates that the market is leaning towards call options, which are bets on a price increase. A significant portion of these contracts points to an expected price surge towards $80,000 by November 29. This level of confidence is reflected in the open interest on these contracts, showing a clear market focus on a substantial price rise.
The Role of Options in the Bitcoin Surge
Bitcoin options, a financial derivative that allows traders to speculate on the future price of the asset without directly owning it, are a key factor driving this forecast. Call options, which give holders the right to purchase Bitcoin at a future date, have outpaced put options (bets on a price drop) by a large margin. This signals that investors are more focused on capturing potential gains rather than hedging against losses. Jake Ostrovskis, an over-the-counter trader at Wintermute, noted that call option premiums are relatively high, underlining a strong appetite for upside potential.
Market makers, who facilitate liquidity, adjust their positions in response to these option trades, often buying BTC on the spot market to cover their risks. This hedging activity can drive the price of Bitcoin even higher, as demand in the spot market increases.
David Lawant, head of research at FalconX, echoed this sentiment in a Bloomberg interview, stating,
“The market seems to agree that Bitcoin will perform well regardless of the election outcome.”
He highlighted that option activity around the election shows a clear upward trend, supporting the view that BTC could reach new heights in the near term.
Another crucial factor driving this bullish sentiment is the recent approval of Bitcoin ETF options by the U.S. Securities and Exchange Commission (SEC). After a prolonged waiting period and legal battles, the SEC’s decision to allow options trading on Bitcoin ETFs, such as BlackRock’s iShares Bitcoin Trust, has injected more liquidity into the market. This approval is seen as a major milestone, enabling investors to better manage risk while also attracting institutional capital.
The increased liquidity brought by ETF options further solidifies Bitcoin‘s bullish outlook, making it easier for larger investors to enter the market with confidence.
As a result, analysts believe Bitcoin is positioned for a breakout regardless of the election winner. However, there are still different scenarios in play depending on the political outcome. For instance, analysts at Bernstein suggest that if Donald Trump wins, Bitcoin could surge to $90,000, while a victory for Kamala Harris may limit the rally to $40,000. Despite these projections, the consensus remains that the cryptocurrency market is on the cusp of significant growth, driven by the strategic actions of options traders and institutional interest in Bitcoin-related products.