Bitcoin (BTC), the trailblazer of digital currency, has soared past the $80,000 mark today, achieving a remarkable 16% gain over the week and hitting its highest price since February. The surge in Bitcoin’s value comes in the wake of Donald Trump’s victory in the US presidential election, a result that has incited a wave of optimism for the future regulatory landscape of digital assets.
Velo Data, renowned for its analysis of the cryptocurrency market, has reported a significant uptick in the annualized rolling premium on three-month bitcoin futures on major exchanges, such as Binance and Deribit. As Bitcoin has surged, the futures premium has risen above 14% for the first time since June. On the Chicago Mercantile Exchange (CME), the futures premium exceeded 10% on Friday. This upward trend in premium implies a bullish sentiment among investors, potentially enticing carry traders who are looking to exploit price disparities between markets.
The options markets have also seen a surge, with a notable increase in open interest in an $80,000 BTC call option on Deribit. This option is a wager that Bitcoin’s price will climb above $80,000, and its interest has now reached over $1.6 billion. Interestingly, traders began setting their sights on this level even before the US election, predicting that Bitcoin would reach fresh heights before the year draws to a close.
Data from Amberdata, a blockchain and crypto asset data company, indicates that the $80,000 strike price carries the highest negative gamma intensity. This increases the probability of significant price fluctuations should Bitcoin maintain its position above this level. In options trading, a negative gamma position implies a net short position at $80,000 for market makers. This could prompt these liquidity providers to acquire additional Bitcoin should the price continue to rise, thereby stoking further bullish volatility in the market.
While these are undoubtedly exciting times for investors and traders in the cryptocurrency market, it is crucial to remember that this article does not constitute investment advice. The digital asset space is notoriously volatile, and while the potential for high returns is alluring, the risk of substantial losses is equally real. As always, investors should conduct thorough research before making any trading decisions and consider seeking advice from financial professionals.
This surge in Bitcoin’s value marks a significant milestone in the cryptocurrency’s history and shines a spotlight on the broader digital asset space. As we look ahead to the future of Bitcoin and other cryptocurrencies, it is clear that their impact on the global financial landscape cannot be understated.