With Bitcoin (BTC) on track to clinch its strongest weekly close since March, excitement within the crypto community is at an all-time high. The recent rush of spot Bitcoin ETF applications from major financial institutions, such as BlackRock, has fueled market euphoria. According to Vetle Lunde, a senior analyst at K33 Research, an approval of such ETFs would “profoundly impact the market structure of Bitcoin” by reducing barriers for financial advisers to offer exposure to the cryptocurrency.
Among the optimistic voices is Cathie Wood, CEO and Chief Investment Officer of ARK Invest, who has set a target of $1 million for Bitcoin. Wood’s confidence stems from her belief that Bitcoin can outperform even in deflationary environments by addressing counterparty risks inherent in traditional financial systems.
Interestingly, early this month, bearish trades in the bitcoin options market gained traction after the SEC took action against Coinbase and Binance, leading to a drop in BTC’s price to $26,300. However, the sudden 10% surge in BTC within two days caught bearish traders off-guard. As a result, if BTC’s price remains around $29,800, only $5 million worth of put options will be available. This suggests that the right to sell Bitcoin at $28,000 or $29,000 will be invalid if BTC trades above that price at the time of expiration.
On the flip side, bullish traders are looking to profit from today’s expiry. Possible scenarios depending on BTC price ranges involve the following:
1. In the price range between $27,000 to $28,000, 3,500 buy options (calls) are compared to 1,200 sell options (puts), giving buy instruments a net advantage of $60 million.
2. For the $28,000 to $29,000 range, 7,300 buy options (calls) face 500 sell options (puts), where the net advantage increases to $195 million for buy instruments.
3. Between $29,000 and $30,000, with 8,600 buy options (calls) and merely 100 sell options (puts), the advantage widens to $250 million for buyers (bulls).
4. Lastly, in the $30,000 to $31,000 range, 10,400 buy options (calls) are pitted against zero sell options (puts), resulting in total dominance for the bulls and a profit of $310 million.
In conclusion, the market overview reveals excitement and optimism among various stakeholders in the cryptocurrency world. Regardless of the recent SEC crackdown on major crypto exchanges, bullish sentiments are still prevalent alongside the growing anticipation surrounding spot Bitcoin ETFs. However, do conduct your market research before making any investment decisions, as cryptocurrency markets are highly volatile and ever-changing.
Source: Coingape
