Crypto traders, keenly attuned to the rippling effects of the forthcoming U.S. elections on the digital assets market, have funneled substantial capital into Bitcoin (BTC) options linked to this pivotal event. These specialized election expiry options, scheduled for settlement four days post-November 4 elections, have seen a surge in activity since their inception on Deribit a month ago. As of the latest data, the notional open interest—representing the total dollar value of active contracts—stands at a staggering $345.83 million, according to Amberdata.

A significant 67% of this open interest is tied to call options, which are financial instruments offering unlimited upside potential at the risk of limited losses. The remaining interest lies in put options, which serve as a hedge against potential price declines, resulting in a put-call ratio of less than 0.50. This indicates a strong bullish sentiment, with twice as many calls in play as puts, reflecting optimistic expectations surrounding the election’s impact on the crypto markets.

“These election-specific contracts provide investors a strategic avenue to leverage the heightened market interest by speculating on the election’s direct influence on crypto assets,” noted Wintermute, an algorithmic trading firm, in a report shared with CoinDesk. The firm highlighted the 0.50 put-call ratio as evidence of prevailing bullish sentiment, driven by the significant volume of call trades.

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The most favored contract is the call option at the $80,000 strike price, commanding an open interest exceeding $39 million. Generally, open interest is heavily skewed towards higher strike calls, ranging from $70,000 to $140,000, signaling traders’ anticipation of potential new record highs around the election period. On the other hand, $39 million is locked into the $45,000 put option, suggesting a measure of caution or hedging against downward movement.

“The concentration of open interest in call options at strike prices around $80,000 and $100,000 underscores traders’ expectations of significant upside in Bitcoin, while the presence of put options at the $45,000 strike indicates a strategic approach to downside protection,” Wintermute elaborated in their market commentary.

This landscape of Bitcoin options tied to the U.S. elections highlights a high-stakes game of anticipation, where traders are positioning themselves for potential seismic shifts in the market, driven by political outcomes and their cascading effects on the world of digital assets.