- Bitcoin traders are hedging their bets.
- The fallout from President Donald Trump's Wednesday tariffs has ignited uncertainty.
Bitcoin traders are preparing for a volatile month ahead as the impact of President Donald Trump’s tariff announcements rocks the crypto market.
Options data on Deribit for the end of April shows traders casting a wide net — the most popular bets are for Bitcoin to surge to $100,000, or plummet to $70,000.
The shift comes after Trump’s tariffs blindsided traders on Wednesday, igniting uncertainty and sending financial markets into a tailspin.
Bitcoin plunged with equity markets on Friday amid renewed fears of a global trade war. The price fell to about $81,500, while the S&P 500 Index is on track to plunge again after Thursday saw its worst day since the start of the Covid pandemic in 2020.
Options are derivatives that let traders bet on price movements. Calls represent bullish bets, while puts pay out when asset prices fall.
While some traders are hedging against a sudden Bitcoin surge, bearish bets are seeing the most volume.
Over the past day, almost 63% of all options contracts traded were puts — despite them only accounting for 40% of options in circulation.
The most popular strike, the price at which a put option starts making money, is $78,000 for the April 11 expiry, signalling that traders are hedging against further downside. Traders piled $1.8 million into that bet.
Traders are also overall paying more for puts than calls, according to amberdata. This indicates that traders are more concerned about price drops and are willing to pay more to protect their investments.
The Fed
At the same time, expectations for the Federal Reserve to cut interest-rates — typically a bullish catalyst for Bitcoin — are taking hold.
CME Group’s FedWatch now shows traders expect a 1% reduction in interest rates by the end of the year, up from 0.75% of cuts before the tariffs were announced.
The Federal Reserve’s so-called dot plot, released at the end of the first quarter, showed its policymaking committee sees only two interest rate cuts over the coming year, however.
Economists generally expect that Trump’s tariffs will stoke inflation, making the Fed potentially less likely to cut interest rates.
Looking ahead
Despite options data indicating traders are uncertain about the crypto market in the near-term, industry players are still bullish.
Robert Le, a senior analyst at venture capital research firm Pitchbook, told DL News this week that the recent $2 billion investment in crypto exchange Binance from MGX, a firm linked to the Abu Dhabi government, sets the stage for bigger deals.
“Investors are still very active,” he said.
Initial public offerings — or IPOs — are also set to become a hot trend.
Circle, the USDC stablecoin issuer, announced on Tuesday its intention to go public this year. Several other crypto firms have also hinted at the idea.
“You’re going to see a whole host of companies — come May or June — listing on the New York Stock Exchange or Nasdaq,” Galaxy Digital CEO Mike Novogratz said at the Ondo Summit in February.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
