Bitcoin Surges Above $119K Amid U.S. Shutdown; BTC Options Cheap
Bitcoin and Cryptocurrency Market Surge
- Bitcoin surged to its highest level in over two months, reaching $119,455, following a U.S. government shutdown.
- The cryptocurrency rose nearly 4% in the past 24 hours. Other major tokens like ETH, XRP, SOL, and DOGE increased by 4% to 7%.
- The CoinDesk 20 Index jumped 5% to 4,217 points.
Impact of U.S. Government Shutdown
- The shutdown halted operations as Congress failed to secure a funding deal, potentially delaying key financial data releases such as the nonfarm payrolls report.
- This situation could lead to a positive liquidity impulse, reducing borrowing costs and encouraging risk-taking in financial markets.
Federal Reserve's Potential Actions
- There is speculation about a potential 25 basis point rate cut by the Fed in October, with further cuts possible by December.
- This could lower real yields and weaken the dollar, historically supporting BTC.
Market Strategies and Implications
- Options on Deribit may be an effective way to hedge against potential volatility, viewed as cheap due to steep contango in implied volatility.
- Strategies like long straddle are suggested for potential profit from significant price movements in either direction.