Bitcoin (BTC) Options Market Bets Big on $100K Price Target by Year-End

The $100,000 call is the most popular bitcoin option on Deribit.

Crypto traders are piling into bullish bitcoin (BTC) options at a record pace, betting on a sustained rally in the world’s largest cryptocurrency.

As of Monday, traders have locked in nearly $1 billion in call options at a $100,000 strike on Deribit, providing buyers with an asymmetric upside above the said level. The value of the open interest in the BTC call options expiring on Nov. 8, the day when the U.S. election results will be announced, stood at $938 million.

"The highest open interest across all expirations appears at $100K and $70K for bitcoin, which some market participants interpret as supporting the bullish sentiment that seems to be pervading the market," crypto trading firm Wintermute said in a note shared with CoinDesk.

A call buyer has the right but not the obligation to purchase the underlying asset at a predetermined price on or before a specific date and is implicitly bullish on the market. Traders, anticipating price rallies, often buy cheap out-of-the-money options like the $100,000 call, which are relatively cheaper than those closer to the ongoing spot price.

Traders are also seen to be concentrating on the $45,000 strike in the BTC puts expiring on Nov. 8, with $117 million in open interest at the said level. The popularity of the $45,000 points is consistent with the tendency of traders to seek downside hedges ahead of a binary event like the election results.

"The volatility surface indicates a bias toward the downside until late October/November when the market begins to favor calls over put protection. Current positioning suggests support for a post-election rally," Jake Ostrovskis, OTC Trader at Wintermute, told CoinDesk in an email.

The open interest in December expiry is concentrated heavily in call options, with the $100,000 strike being the most popular in a sign of expectations of a year-end surge.

However, traders on decentralized betting platform Polymarket see a low probability of the cryptocurrency tapping the $100,000 mark by the end of the year.

At press time, the Yes side shares in the "Will Bitcoin Hit $100K in 2024" contract traded at 15 cents, representing a minuscule probability of a rally into six figures. The contract will automatically resolve to yes should BTC's price on Coinbase hit a high of $100,000 on or before Dec. 31.

Meanwhile, traders see just over 50% chance of bitcoin surpassing the record high of $73,798 by the year's end.

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