Increase in CME Bitcoin Futures Options Trading Volume Ahead of U.S. Election

The trading volume of CME options on bitcoin futures has increased ahead of the U.S. election, with significant trades suggesting institutional investors anticipate major price movements post-election on November 5.

Arbelos Markets CEO Joshua Lim informed The Block that large derivatives trades are predicting a surge in bitcoin’s price above $85,000 by the end of November. For instance, a purchase of 3,050 bitcoin units in options expiring on November 29 at a strike price of $85,000 involved a $4.6 million premium, with $173,000 of vega and $42 million of delta. These figures imply that if bitcoin’s price nears or exceeds $85,000, the value of these options could rise rapidly. The high premium suggests institutional traders are confidently betting on this price milestone.

> "CME bitcoin options have seen some of the largest volume days ever, ahead of the U.S. election. There's been very bullish positioning into the election, and it's encouraging to see institutions getting involved in CME. This may indicate growing liquidity in crypto derivatives as the asset class matures," said Joshua Lim.

Trump Leads in Betting Markets

Lim also mentioned that bitcoin is regarded as an inflation hedge and a proxy for the U.S. presidential election, especially if Donald Trump wins. "The options market is predicting a 7% move on election day, which seems low compared to bitcoin's sensitivity to risk assets," he added.

Currently, Trump leads blockchain-based betting markets with a 64.5% chance of winning on Polymarket, while Kamala Harris holds 35.4%.

Bitcoin open interest-weighted funding rates have reached multi-month highs, indicating a bullish market positioning. The funding rate has spiked to 0.0153%, the highest since early June, according to data from CoinGlass.

As of now, bitcoin is trading at $72,500, with a global cryptocurrency market cap of $2.54 trillion, reflecting a 1.9% decrease in the last 24 hours, per CoinGlass data.