Call options trade at a premium to puts, and open interest in out-of-the-money calls has grown,” Vetle Lunde, head of research at K33 Research, told CNBC.
Buying a call option is a bet the asset price will move higher.
Buying a put option is a bet the asset price will fall.
The CME derivates exchange offers bitcoin futures contracts and is a popular way for institutions in the U.S. to make bets on the future price of bitcoin.
On the back of election results and the Fed’s unanimous vote to again slash the benchmark rate, the crypto market broadly surged into the weekend.
Futures premiums skyrocketed as Bitcoin hit a new all-time high of almost $81,000, indicating that investors think the bull market in the biggest cryptocurrency in the world is set to see even greater gains thanks to the U.S. A. elections in which many pro-crypto candidates were elected.
More than $2.08 billion was open interest in bitcoin’s price surpassing $90,000 on the well-known Deribit derivatives exchange, one of the few cryptocurrency-native platforms that allows futures trading. Deribit covers the majority of the market for offshore options.
“The options market has a strong bias in favor of sustained momentum. Vetle Lunde, head of research at K33 Research, told CNBC that open interest in out-of-the-money calls has increased and that call options trade at a premium to puts.
The buyer of a call option has the right, for a predetermined amount of time, to purchase shares of the underlying asset at a specific price. Purchasing a call option is a wager that the value of the asset will increase. Purchasing a put option is a wager that the value of the asset will decline.
The CME derivatives exchange is a well-liked option for U.S. institutions to purchase bitcoin futures contracts. A. in order to place wagers on the future value of bitcoin. CME premiums for ether and bitcoin averaged 14.5 percent and 14.5 percent on Friday, respectively, Velde told CNBC. Velde claims that prior to the election, these premiums were at 7% and had remained at or just below 10% for the majority of the previous six months.
While yields largely stabilized well into the double digits after the election became clear, he added, “the recent surge is a meaningful deviation higher emphasizing the bullish flows of late.”.
According to Velde, “we witnessed the first significant illustration of rising yields in offshore derivatives alongside the growth in leverage, indicating that the move is being led by determined risk-takers positioning for further upside.”.
The early stages of bitcoin’s upward trend were accompanied by a notable increase in open interest in perpetual swaps, which are contracts that let buyers make predictions about future price movements without having an expiration date.
But because neither CME futures nor ETFs are open for trading on weekends, liquidity in cryptocurrency markets is usually worse than it is during the week. As a result, Velde claims that moves tend to overreact and significantly retrace once these markets reopen.
During his campaign, President-elect Donald Trump pledged to make the US the “crypto capital of the world.”. Among his numerous promises to the cryptocurrency community was the establishment of a national cryptocurrency reserve using the more than $16 billion in bitcoin that the U.S. S. The government has accumulated wealth by lowering interest rates and seizing assets. Since it becomes more affordable to borrow money, monetary policy easing usually coincides with a spike in cryptocurrency prices.
Establishing the benchmark rate is the Federal Reserve, which directs the nation’s monetary policy. It functions independently of the White House by design as well. The Fed authorized a rate cut for the second time in a row Thursday.
Following the election results and the Fed’s unanimous decision to lower the benchmark rate once more, the cryptocurrency market saw a significant upswing into the weekend. With a 30% increase over the previous seven days, ether outperformed bitcoin, and on Sunday, Solana’s market capitalization surpassed $100 billion.
In just the last three trading days, the spot funds collectively added $2.03 billion, bringing the total market capitalization of all spot bitcoin ETFs to over $80 billion.
Following the victory of candidates backed by the cryptocurrency industry in races up and down the ballot, fintech companies with a crypto affiliation were among the best performers.
Coinbase’s weekly share price surged 48%, marking the company’s best performance since January 2023. During the election cycle, Coinbase was one of the biggest corporate donors, contributing over $75 million to Fairshake and its affiliated PACs. The company also recently pledged $25 million to support the pro-crypto super PAC in the 2026 midterm elections.
The fact that Trump has vowed to remove SEC Chair Gary Gensler may be good news for businesses like Coinbase that are suing the agency for alleged securities violations.
In an interview, Coinbase’s chief legal officer Paul Grewal stated, “Tuesday night was definitely a big night for crypto and the crypto voter.”. The Congress is going to be the most pro-crypto ever, and Coinbase has contributed to that. “.”.
For the week, Robinhood, a platform that lets users buy and sell various digital currencies, increased by 27%. In May, the SEC sent the online brokerage a Wells Notice, which frequently comes before official charges.
The objective at Robinhood is to be able to work within the administration, the general manager of the company’s cryptocurrency division told CNBC.
The cryptocurrency industry is characterized by its rapid pace. Johann Kerbrat, the vice president and general manager of Robinhood Crypto, stated, “It’s complicated; it was made by engineers, for engineers.”. “We want to educate policymakers about it and assist them in promoting appropriate consumer protections. “”.
