$6 Million Bitcoin Call Option Purchase Signals Price Surge Expectation
Bitcoin (BTC) market trends suggest potential for record high prices following President-elect Donald Trump’s inauguration on January 20. A trader on crypto exchange Deribit purchased over $6 million in call options with a $100,000 strike price expiring on March 28, indicating expectations for significant price increases shortly after the inauguration.
Traders are also actively buying $120,000 strike options, reflecting strong anticipation of a price rally above that level. The $120,000 call is the most popular option on Deribit, with a notional open interest of $1.52 billion at press time.
A call option grants the buyer the right to purchase the underlying asset at a specified price later. Buyers of call options typically expect bullish market movements and seek asymmetric gains from anticipated price increases.
The renewed interest in call options coincides with BTC's attempt to reclaim the $100,000 mark, trading above $99,500, an 8% recovery from the December 30 low of $91,384, according to CoinDesk and TradingView data.
Greg Magadini, director of derivatives at Amberdata, noted that the inauguration period may bring bullish announcements and policies that could serve as catalysts for Bitcoin's upward movement. CF Benchmarks echoed this sentiment but cautioned that delays in policy development could dampen market optimism.
CF Benchmarks stated that a restructured SEC under pro-cryptocurrency leadership might reduce enforcement risks and encourage innovation, potentially boosting investor confidence. However, they warned that implementation delays or shifts in policy could introduce short-term volatility.
Since Trump's election victory in early November, expectations for pro-crypto regulatory changes have improved market sentiment, with BTC rising from approximately $70,000 to over $108,000 weeks post-election. Nonetheless, the rally has slowed in late December due to year-end profit-taking and hawkish Federal Reserve rate projections.