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31 October, 2024

Institutional Money Flows into Bitcoin: $79,300 Target by November?

31 October, 2024

Institutional Traders Place Big Bets on Bitcoin

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The cryptocurrency market is buzzing with speculation as institutional traders make significant moves in the Bitcoin options market. Recent activity on the Chicago Mercantile Exchange (CME) suggests a strong bullish sentiment towards Bitcoin, with some traders aiming for a price exceeding $79,300 by the end of November.

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Joshua Lim, co-founder of Arbelos Markets, a leading cryptocurrency derivatives liquidity provider, highlighted two massive trades executed in the past week. On October 25th, traders purchased 1,875 Bitcoin units of the November 29th $70,000 strike calls. This means they are betting on Bitcoin surpassing $70,000 by the end of November. The trade involved a hefty premium payment of $8.3 million, indicating a significant level of confidence in Bitcoin’s potential.

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Just a few days later, on October 29th, another large trade occurred with the purchase of 3,050 Bitcoin units of the November 29th $85,000 strike calls. This trade involved a premium payment of $4.6 million, further reinforcing the bullish sentiment. These trades, with a combined notional value of approximately $350 million, are significant even in the context of Deribit, the world’s largest crypto options exchange.

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The breakeven point for these positions is just below $79,300, meaning Bitcoin needs to exceed this level by the option’s expiry date for traders to start seeing profits. This represents a potential 16% increase from Bitcoin’s price at the time these trades were executed.

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The timing of these trades is particularly noteworthy, coinciding with the upcoming US presidential election. Market volatility is expected to increase, potentially influencing the entire Bitcoin and cryptocurrency market. While the market reaction to the election outcome is uncertain, some experts believe a Trump victory could be bullish for Bitcoin.

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These institutional trades reflect a growing confidence in the future of Bitcoin, indicating that institutional investors are increasingly embracing the cryptocurrency market. The large investments and the bullish price targets suggest a positive outlook for Bitcoin, potentially pushing the price even higher in the coming weeks.

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It remains to be seen whether Bitcoin will indeed reach the $79,300 mark by the end of November. However, these institutional trades provide a clear signal that the cryptocurrency market is attracting significant institutional capital, fueling further growth and potentially driving Bitcoin to new all-time highs.