Bitcoin Options Traders Prepare for Price Increase

Bitcoin options traders are gearing up for a potential price increase following the U.S. presidential election on Nov. 5. Joshua Lim, CEO of Arbelos Markets, noted an uptick in traders purchasing post-election expiry call options in the $70,000-$80,000 strike price range.

> "There’s been a combination of month-end systematic selling by yield-seekers and a 'steepening' bias to buy post-election call options cheapened by selling pre-election options," Lim explained to The Block. This strategy indicates expectations of an upward breakout in Bitcoin's market trajectory despite ongoing global uncertainties.
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> "I see a surge in call buying for strikes in the $70,000-$80,000 range and selling of $100,000 plus, as the expectation is for implied volatility to decrease once the election resolves," he added.

Bitcoin as an Inflation Hedge

Lim mentioned that Bitcoin is increasingly viewed as both an inflation hedge and a proxy for the U.S. presidential election, particularly if Donald Trump wins. "The options market is pricing a 7% move on U.S. election day, which feels a bit low relative to Bitcoin's beta to risk assets," he said.

Trump Leads in Betting Markets

In the lead-up to the election, Donald Trump is expanding his lead over Vice President Kamala Harris in blockchain-based betting markets. Trump currently has a 60.3% chance of winning on Polymarket, while Harris sits at 39.6%.

The focus on Trump as a potential catalyst for Bitcoin ties into broader market positioning. Lim highlighted the falling put-call volume ratio for Bitcoin options, indicating a net increase in call options activity as traders anticipate Bitcoin appreciation in the weeks following the election.

As of now, Bitcoin is trading at $67,500, with a global cryptocurrency market cap of $2.42 trillion, reflecting a 0.2% decrease in the last 24 hours, per Coinglass data.