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Institutions position for Bitcoin price surge ahead of US election

Institutions position for Bitcoin price surge ahead of US election

GrafaGrafa2024/10/31 10:00
By:Mahathir Bayena

Institutional investors are gearing up for potential Bitcoin (CRYPTO:BTC) volatility as the US election approaches, reflected by increased call option activity on CME Bitcoin futures. 

Joshua Lim, co-founder of Arbelos Markets, observed a significant rise in call option purchases recently. 

“We’re seeing a huge uptick in CME call buying into the election, including some of the largest ever prints on the exchange,” Lim shared. 

Over the past week, $350 million in notional value of November call options were traded, with a breakeven price of nearly $80,000 at November’s end. 

Lim described the sentiment as “very bullish positioning into the election” and emphasized, “It seems clear that funds dedicated to crypto strategies continue to grow as the asset class matures.” 

Sidney Powell, co-founder of Maple Finance, also noted an increase in borrowing activity in institutional crypto lending markets, driven by expectations of election-related market movements. 

“We’re seeing more inbound requests for borrowing from some of the larger institutions,” Powell said. 

“Demand for larger-ticket loans and borrowing against open trade credit has increased significantly.” 

He explained that these institutional players, such as prime brokerage firms and over-the-counter desks, are likely preparing to provide margins to clients or leverage their positions in anticipation of a potential bull market. 

Powell added, “These players are anticipating there might be some volatility to the upside and a run-up in asset prices.” 

The recent activity in CME Bitcoin options, a preferred venue for institutional investors, has seen some of its largest trading days, indicating a growing confidence in the asset class. 

With institutional investors positioning themselves ahead of the election, market observers are closely watching for Bitcoin price swings as the outcome could shape the crypto market's near-term trajectory.

At the time of reporting, the Bitcoin price was $72,267.71.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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