Bitcoin Options Traders Raise Bets on Record High by Month-End as ETF Flows Resume

(Bloomberg) -- Options traders are raising bets that Bitcoin will reach a record high by the end of the month with optimism for US interest rate cuts and inflows into exchange-traded funds rising.

Options traders are betting on a record-breaking month for Bitcoin (CRYPTO: BTC) as optimism builds for US interest rate cuts and exchange-traded fund inflows rise.

According to data from Deribit, the largest crypto options exchange, Bitcoin call options with a strike price of $75,000 across all expirations have the highest open interest, followed by $100,000 and $80,000 strike prices, respectively.

Call options give buyers the right to purchase the underlying asset at a fixed price within a set time.

“Traders are optimistic, anticipating new all-time highs,” said Luuk Strijers, chief executive at Deribit. “The bullish sentiment in the BTC options market is driven by strong BTC ETF flows, anticipation of US interest rate cuts, the ECB cutting rates, and the approval of an ETH ETF.”

Bitcoin climbed as high as $71,756 this week and was mostly little changed on Thursday after snapping a five-day winning streak.

The largest cryptocurrency retreated from a record high of $73,798 set on March 14 as demand for recently approved Bitcoin ETFs showed signs of cooling.

Now with Federal Reserve rate cut expectations fueling demand for riskier assets, inflows have resumed and traders are setting their sights on a fresh high.

The call options expiring on June 28 have the most open interest around the strike price of $75,000, while the open interest for those expiring on July 26 and Dec. 27 is highest around $100,000. They “all point toward a positive short and longer term outlook,” Strijers said.

Other crypto markets are also flashing bullish signals.

“In futures, premiums have widened, and perpetuals have resumed to trade at premiums to spot,” said Vetle Lunde, senior research analyst at crypto specialist K33 Research. “Across the market, a positive bias is spreading.”

Perpetuals are one of the most popular futures contracts used by crypto traders, allowing them to make bets on prices without having to settle at a fixed time.