- Options traders have made notable increases to bets on Bitcoin’s price increasing over the past few weeks.
- Increased interest in Bitcoin is likely due to anticipation of spot ETF approval, said B2C2’s head of trading.
Happy Hump Day!
While Bitcoin continues to trade in a tight range, options traders have been making bullish bets, according to crypto market maker B2C2. Interest in Bitcoin has risen across the board, the firm said, with a 40% share of volume, as spot exchange-traded fund hopes persist.
Let’s dig in!
Bulls line up ETF bets
There’s been a notable uptick in bullish bets on Bitcoin over the past couple of weeks.
Options traders have increased upside call buying recently, “reflecting a bullish view on Bitcoin,” Ed Goh, head of trading at B2C2, said in a market commentary shared with DL News.
Buying calls gives traders the option to buy Bitcoin at a certain price up until a specified date and shows a bullish outlook.
Some popular call options on crypto derivatives platform Paradigm suggest traders see the price of Bitcoin rising to $29,000 in the coming weeks.
It has hovered around $27,000 for most of the past month.
Interest in Bitcoin is also higher this month. The leading cryptocurrency by market capitalisation had around 58% of all buying interest and 40% of the share of volume, Goh said.
He attributed the positive activity to anticipation of a spot Bitcoin ETF approval.
Most spot Bitcoin ETF applications have been delayed until January 2024, although analysts at Bloomberg Intelligence remain positive.
The chances of approval by the end of the year are around 75%, and this number “would only go up if we go into January,” Eric Balchunas, an ETF analyst at Bloomberg Intelligence said on X, formerly Twitter.
ETF hopefuls are anticipating the US Securities and Exchange Commission’s decision, due Friday, on whether or not to appeal Grayscale’s win in August.
The digital asset manager won its appeal to have the regulator’s rejection of its proposal to convert its Bitcoin trust into a spot ETF overtuned on August 29.
The SEC has until Friday, October 13, to appeal the decision.
SEC Chair Gary Gensler’s agency has changed its approach to spot Bitcoin ETF applications of late, Balchunas said.
The market watchdog has been “actively engaging with issuers on their current filings,” through comments, “which hasn’t ever happened before,” he said.
Based on this, Balchunas and his colleagues think an appeal or a denial is unlikely.
Traders don’t want to be short Bitcoin due to “all of the ETF catalysts,” Coinbase institutional sales trader Greg Sutton said on a market call Tuesday, echoing Goh’s comments.
While Bitcoin has been favoured Ethereum has come under pressure.
Investors will continue to avoid going long on Ethereum in the near term, Sutton said, “until something changes on the risk front or with the protocol itself,” he added, noting that a increase in transactions on Ethereum might benefit the outlook.
Crypto market movers
- Bitcoin dropped 1.5% to $27,100 over the past 24 hours.
- Ethereum traded around $1,570 by 2 pm London time on Wednesday after it shed 0.7% since Tuesday.
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Adam Morgan McCarthy is DL News’ London-based Markets Correspondent. Got a tip? Reach out at adam@dlnews.com.
