Bitcoin has surged to a record high of nearly $81,000, reflecting a strong bullish sentiment among investors. This increase has been accompanied by a significant rise in futures premiums, suggesting that many believe this upward trend in the world’s largest cryptocurrency will continue, particularly following recent U.S. elections that saw an influx of pro-cryptocurrency candidates.
Trading activity on Deribit, a leading crypto derivatives exchange, has seen open interest for bitcoin futures surpassing $90,000, climbing to over $2.8 billion. This exchange notably leads in the offshore options market.
Vetle Lunde, head of research at K33 Research, mentioned that the options market is heavily biased towards ongoing momentum, highlighting that call options, which allow investors to buy bitcoin at a specific price, are currently trading at a premium compared to put options. He indicated that there has been a notable increase in the open interest for out-of-the-money calls, further indicating a bullish outlook.
In more traditional trading avenues, the CME derivatives exchange is a key platform for U.S. institutions betting on bitcoin’s future price. Premiums on CME for both ether and bitcoin have recently averaged 14.5% and 14%, respectively, a considerable uptick from an average of around 7% prior to the elections.
Lunde emphasized that this surge demonstrates a clear shift towards bullish trading flows, with recent yields stabilizing in double digits post-election. He also noted a marked increase in leverage and interest in offshore derivatives, showcasing a willingness among risk-takers to invest in further potential gains.
While bitcoin’s impressive ascent coincides with a growing interest in perpetual swaps—contracts allowing speculation without a defined expiration—it’s important to note that liquidity tends to drop during weekends. This often causes price movements to overreact, with potential for significant reversals when weekday trading resumes.
This overall trend suggests a vibrant and dynamic crypto market, with investors optimistic about the future of bitcoin. As more investors engage with this asset class, it may pave the way for greater acceptance and integration of cryptocurrencies into mainstream finance, hinting at a bright future for this digital economy.