Record $2.8 Billion Bet on Bitcoin as Investors Eye $90,000 Milestone Following U.S. Elections

Source: livemint.com

Bitcoin recently reached a historic high near $81,000, fueling a surge of enthusiasm among investors who believe the cryptocurrency’s upward trajectory is set to continue. This optimism follows recent U.S. elections, which saw an influx of pro-crypto candidates winning office, leading to a bullish outlook in the crypto market.

The open interest in bitcoin’s price surpassing $90,000 has now exceeded $2.8 billion on the Deribit derivatives exchange, one of the leading platforms for cryptocurrency futures trading. Deribit dominates a significant portion of the offshore options market, where the majority of trades on bitcoin futures take place.

Analysts have noted a strong bias in the options market favoring continued upward momentum, with call options trading at a premium compared to puts. In simple terms, a call option gives investors the right to buy Bitcoin at a certain price within a specific time frame, a common tactic for those betting on Bitcoin’s price increases. By contrast, put options represent bets that the asset price will fall. The surge in open interest in out-of-the-money calls reflects a prevailing optimism about Bitcoin’s future price growth.

Rising Futures Premiums Indicate Positive Sentiment

The CME derivatives exchange, widely used by institutions in the United States to bet on Bitcoin’s future price, has also witnessed substantial activity. Premiums for bitcoin and ether futures on CME averaged 14.5% and 14%, respectively, marking a notable increase from pre-election levels. Before the election, these premiums hovered around 7% and had generally stayed below 10% over the past six months. The recent spike underscores a clear bullish sentiment that has emerged as a response to the election outcomes.

According to analysts, the growth in premiums suggests an increase in high-risk positions as investors anticipate further price surges. The escalation in leverage coincided with significant increases in open interest in perpetual swaps, a type of derivative contract that allows investors to speculate on future prices without a set expiration date.

Weekend Volatility and Market Liquidity

While bitcoin’s price upward trend is promising, the weekend often brings heightened volatility to crypto markets, as liquidity tends to be lower. With major platforms like CME futures and ETFs closed over the weekend, price movements can be more extreme than during the workweek. This often leads to notable retracement once the weekday trading resumes, reflecting the market’s reaction to limited liquidity.

Trump’s Pro-Crypto Stance and the Possibility of Bitcoin Reaching $100K

The election of Donald Trump, who has publicly pledged to advance pro-crypto policies, has added to the market’s enthusiasm. Trump has outlined ambitious goals for the crypto industry, including establishing the United States as the global center of crypto innovation. His proposed initiatives include creating a national crypto stockpile with over $16 billion in bitcoin currently held by the government, a sum amassed through asset seizures.

Additionally, Trump has vowed to pursue aggressive interest rate cuts, which often lead to increased crypto prices by making borrowing cheaper. With the Federal Reserve independently setting interest rates, its recent decision to lower the benchmark rate has also contributed to the upswing in the crypto market. The Fed’s second consecutive rate cut provided additional fuel for the crypto rally, leading to notable gains across the sector. Ether, in particular, has outperformed bitcoin, with its value increasing by 30% in just the last week. Meanwhile, Solana’s market cap surged past $100 billion.

The total market capitalization of all spot bitcoin ETFs now exceeds $80 billion, with spot funds adding a remarkable $2.3 billion over the last three trading days alone.

A New Era for Crypto Under the Trump Administration

The recent election cycle marked a major victory for the crypto industry, with many candidates funded by crypto-focused entities winning key races. As a result, companies tied to cryptocurrency have experienced significant gains. Coinbase, for example, saw its share price jump by 48% over the week, representing its strongest performance since January 2023. While Bitcoin’s price also saw upward momentum, the company contributed over $75 million to pro-crypto political action committees and has already committed an additional $25 million to support a pro-crypto super PAC in the upcoming 2026 midterms.

Trump’s commitment to removing SEC Chair Gary Gensler could also favor crypto-related businesses currently engaged in legal battles with the SEC. In response to the election results, executives within the crypto sector have expressed optimism about the new Congress, which is expected to be the most crypto-friendly to date. Leaders in the industry, such as Coinbase’s legal team, have highlighted the impact of increased representation and funding for crypto-friendly legislators.

Crypto Businesses Gear Up for Regulatory Change

Beyond Coinbase, Robinhood has also benefitted from the post-election wave. The online brokerage, which enables users to trade various digital currencies, experienced a 27% increase in its stock value last week. Despite facing a potential regulatory challenge from the SEC, Robinhood’s crypto division remains hopeful about working with the administration to help policymakers better understand and regulate the rapidly evolving crypto market. as Bitcoin’s price continues to climb, Robinhood stands to gain further from its crypto offerings.

As Robinhood’s head of crypto operations noted, the company aims to support the development of user protections while fostering an environment that accommodates crypto innovation. With the U.S. poised for regulatory changes, crypto companies eagerly anticipate a favorable policy shift that could drive further growth in the sector.

In summary, bitcoin’s recent rally and the influx of pro-crypto policymakers suggest a promising future for cryptocurrency. With high expectations for supportive regulatory changes under Trump’s administration, the crypto market could see significant growth, potentially reaching new milestones in the coming months.