Bitcoin Traders Make $100K Price Bets Through CME Options: CF Benchmarks

As a seasoned crypto investor with a knack for reading market trends and a flair for predicting price movements, I must say the current bullish sentiment surrounding Bitcoin (BTC) is undeniably palpable. The recent surge in call option trading for BTC at the $100,000 strike price on both CME and Deribit exchanges suggests that institutional players are betting big on Bitcoin’s continued upward trajectory.

As an analyst, I find myself observing a significant surge in Bitcoin (BTC) trading activity, particularly among institutional investors on the Chicago Mercantile Exchange (CME). It appears they are heavily betting on Bitcoin’s price soaring into six-figure territory.

According to CF Benchmarks, there’s been a surge of interest in the $100,000 call option for trading on the Chicago Mercantile Exchange (CME). This trend seems to mirror the actions of traders who operate on Deribit, another popular platform.

In simpler terms, buying a call option means you have the choice, not the requirement, to buy a particular asset at a fixed price within a certain timeframe. If you believe the value of that asset will increase (being optimistic about the market), then purchasing a call option could be beneficial for you.

It seems traders are actively purchasing Bitcoin call options with a $100,000 strike price. This trend, as indicated by data from CF Benchmarks, has pushed the 30-day constant maturity 25 delta skew beyond the 5 vol threshold, nearing its highest level of the year so far. In simpler terms, this suggests a significant increase in interest for potential Bitcoin price increases, according to Thomas Erdösi, head of product at CF Benchmarks, who shared this information via email with CoinDesk.

25 delta skew quantifies the difference in the cost of call options versus put options, offering an insight into market sentiment. When the value is positive, it signifies that calls are more expensive than puts, suggesting traders anticipate further price increases. This specific 5 volatility level serves as a benchmark in CME’s derivatives tracking the New York variant of CF Benchmarks Bitcoin Reference Rate (BRRNY).

According to CF Benchmarks, there’s been an increase in interest for option contracts with strikes set above $100,000. This is suggested by the higher expected volatility of these options, as indicated by their increased implied volatility.

Traders have been heavily investing in the belief that Bitcoin will reach $100,000, as evidenced by their accumulation of call options on Deribit, a significant offshore trading platform, starting from at least late September.

By the time of publication, Bitcoin broke through the $90,000 barrier and reached new highs above $92,500, disregarding the ongoing increase in the dollar index. The price of BTC has soared by more than 36% since Donald Trump’s victory in the U.S. presidential election on Nov. 5, which was favorable to cryptocurrencies.