Bitcoin (BTC) is currently witnessing growing optimism, with many anticipating a significant price leap following President-elect Donald Trump’s inauguration on January 20. Recent trading activity has sparked considerable interest, particularly a hefty investment of over $6 million on the crypto exchange Deribit for $100,000 strike call options that expire on March 28. This bold move signals a belief that Bitcoin is poised to shatter previous highs soon after Trump takes office.
According to data from Amberdata, this particular trade is an indicator that traders expect Bitcoin to soar. The enthusiasm doesn’t stop there; traders are also actively buying call options at a $120,000 strike, reflecting a strong consensus that prices could push beyond that threshold. Currently, the $120,000 call option stands out as the most sought-after on Deribit, with an impressive notional open interest of $1.52 billion.
So what exactly is a call option? It’s a financial contract that grants the buyer the right to purchase an asset at a predetermined price in the future. When someone opts for this type of trade, it demonstrates their bullish outlook on the market, eager for potential gains as they anticipate rising prices.
The surge in interest for these call options comes at a time when BTC is trying to reclaim that coveted $100,000 mark, trading just above $99,500—an 8% recovery from the low of $91,384 recorded on December 30, as reported by CoinDesk and TradingView.
As Greg Magadini, Director of Derivatives at Amberdata, puts it, the timeframe surrounding Trump’s inauguration is ripe for “bullish announcements and policies that could act as catalysts for Bitcoin’s ascent.” This sentiment resonates with many market watchers.
Adding to this positive outlook, CF Benchmarks, a regulated cryptocurrency index provider, has expressed a similar view while cautioning that delays in policy implementation could temper these enthusiastic projections. They noted that a restructured SEC under a pro-cryptocurrency leadership might alleviate enforcement risks and promote innovation, potentially boosting investor confidence.
Despite the excitement, CF Benchmarks warned that while they expect a robust industry framework to emerge, any slowdowns in policy development could lead to increased market volatility.
Ever since Trump’s election victory in early November, Bitcoin has seen a surge in positive sentiment. The cryptocurrency climbed from around $70,000 to over $108,000 shortly thereafter. However, some of that momentum faded in the latter half of December, likely due to profit-taking as the year wound down and adjustments in Federal Reserve interest rate expectations.
All eyes are now on the market, where traders and investors are eagerly anticipating what could unfold in the coming months post-inauguration. With the possibility of a record price jump, it’s no wonder interest in Bitcoin is at an all-time high.
