Bitcoin (BTC) market trends indicate expectations that prices will reach record levels following the inauguration of President-elect Donald Trump on January 20.
On Saturday, a trader on cryptocurrency exchange Deribit spent more than $6 million to buy $100,000 strike call options set to expire on March 28, according to data source Amberdata.
“This trade anticipates that bitcoin’s new highs will be broken just a few months after Trump officially takes office,” Amberdata said on X.
Traders are also net buyers at the $120,000 strike price, indicating strong anticipation of a rally that will push prices above that level. The $120,000 call option is the most popular option on Deribit, and has a notional open interest of $1.52 billion at press time.
A call option gives the buyer the right to purchase the underlying asset at a specific price later. A call buyer is implicitly bullish on the market and seeks to make asymmetric profits from an expected price rally.
The renewed interest in call options comes as BTC looks to reclaim the $100,000 level. At press time, the leading cryptocurrency by market value was trading above $99,500, marking an 8% recovery from the Dec. 30 low of $91,384, according to data source CoinDesk and TradingView.
“The inauguration and the immediate aftermath will be a prime time for bullish announcements and policies that could be bullish catalysts for Bitcoin to rise,” Greg Magadini, head of derivatives at Amberdata, said in a weekly newsletter.
Regulated cryptocurrency index provider CF Benchmarks expressed a similar view and warned that potential policy development delays, if any, could temper bullish sentiment.
“A restructured SEC under pro-cryptocurrency leadership can reduce compliance risks and foster innovation. These changes, along with simplified compliance requirements, could improve investor confidence,” CF Benchmarks said in an annual report shared with CoinDesk.
“We believe an industrial framework will arrive; however, delays in implementation or policy changes may temper market optimism, creating short-term volatility,” the firm added.
Expectations of regulatory changes in favor of cryptocurrencies have bolstered cryptocurrency market sentiment since Donald Trump won the US election in early November. BTC rose from about $70,000 to new all-time highs above $108,000 weeks after the election. However, the rally has lost steam in the second half of December, likely due to year-end profit taking and aggressive interest rate projections from the Federal Reserve.
