Bitcoin options traders are betting big on BTC hitting a record high of $80,000 by the end of November, regardless of the outcome of the upcoming US presidential election.
Options Traders Expect Record Bitcoin Highs Regardless of Election
As the November 5 election approaches, options markets have shown high implied volatility, particularly for contracts expiring around election day. Investors are primarily opting for call options that grant them the right to buy Bitcoin at higher prices, signaling growing optimism about Bitcoin’s future performance.
David Lawant, director of research at FalconX, a crypto-prime brokerage, believes this optimism stems from a broad market consensus. “Our analysis shows that options activity around the upcoming election has a significant upside bias,” Lawant said, adding that Bitcoin is expected to perform well regardless of who wins the election.
The political landscape is also a factor. Republican candidate and former President Donald Trump has voiced his support for cryptocurrencies, and Bitcoin has sometimes been referred to as a “Trump trade.” Meanwhile, Democratic Vice President Kamala Harris has pledged to support regulatory frameworks for the industry, in contrast to the stricter stance taken under President Joe Biden’s administration. However, other factors such as potential Fed rate cuts and inflation are also fueling market optimism.
The put-to-call ratio, a key indicator of market sentiment, has been trending lower for Bitcoin as the year draws to a close, suggesting that more investors are buying calls than puts. Data from Deribit, the largest crypto options exchange, shows that open interest for the November contract is concentrated at the $80,000 strike price, with additional interest at $70,000. For the December contract, investors are targeting levels as high as $100,000.
For Bitcoin, traders are consistently positioning for a breakout, said Yev Feldman, co-founder of SwapGlobal. “There’s limited reason to go down after the election, so up makes more sense,” Feldman explained.
The higher premiums for call options compared to puts, especially for contracts with maturities longer than one day, suggest investors are bullish. “This suggests investors are using the options market as a tool to capture potential upside risks rather than a hedge against downside risks,” Lawant added.
However, opinions are more divided for non-Bitcoin cryptocurrencies, with the market showing less consensus on how altcoins could respond to different election scenarios.
*This is not investment advice.
