Optimism Soars as Traders Bet on Bitcoin Hitting $50,000 by January 2023!
Surging Expectations for Bitcoin’s Rally
Options traders are placing significant bets on Bitcoin soaring to $50,000 by January next year, amid widespread anticipation of the U.S. Securities and Exchange Commission (SEC) finally approving a Bitcoin spot ETF. According to data compiled by Deribit, the largest cryptocurrency options exchange, this price level is where the majority of open interest (the total number of outstanding contracts) lies for Bitcoin call options expiring on January 26.
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Further reading：BlackRock’s Big Move: Shifting $200 Million to IBTC, as Bitcoin Soars Over $44K
A Historic Comeback for Bitcoin
Bitcoin last touched the $50,000 mark in December 2021, at a time when digital assets were retreating from historic highs as the Federal Reserve began rolling back its record stimulus measures instituted during the pandemic. The cryptocurrency industry is now witnessing a spectacular rebound, fueled by market expectations of a policy shift by the Fed next year and the near certainty of a Bitcoin ETF approval.
“Optimistic sentiment is surging,” states Luuk Strijers, Chief Commercial Officer at Deribit. Since mid-October, Bitcoin’s price has soared by over 60%, spurred by speculations of imminent ETF approvals by major asset managers like BlackRock. At the time of writing, the token’s price is hovering $44,000.
Further reading：Bitcoin Soars Past $40K, Hitting a 20-Month High, While Ethereum Climbs to $2200: Analyzing the Next Resistance Levels
Trading Volumes Indicate Growing Interest
Data from research firm CCData shows that spot and derivatives trading volumes on centralized exchanges rose by 40.7% in November, reaching $3.61 trillion — the highest level since March this year. Derivatives like options and futures continue to dominate crypto trading, as they remain one of the few ways for investors to leverage bets in the wake of the collapse of several major crypto lending institutions in 2022. Cash-settled options and futures contracts enable traders to execute strategies without dealing with crypto-specific issues like custody.
A Year of Diminishing Volatility and Interest
From late March to early October, cryptocurrency prices remained subdued amidst a series of industry bankruptcies and scandals. “Throughout most of this year, volatility has been on a downtrend. The environment has been of low volatility, with reduced trading volumes, lower interest rates in the crypto ecosystem, and overall waning interest in the sector,” says Jaime Baeza, Founder and CEO of AnB Investments, a cryptocurrency hedge fund.
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Renewed Risk Appetite in the Financial Markets
Now, with the potential launch of Bitcoin ETFs, a risk-on sentiment is returning to broader financial markets, and traders are expecting increased interest in cryptocurrencies. “This year we have seen that as Bitcoin moves up, volatility follows. Therefore, a sustained bull market could bring more volatility in the short to medium term,” comments Greg Magadini, Head of Derivatives at Amberdata.
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Keywords: Bitcoin, Cryptocurrency, Options Trading, Bitcoin ETF, SEC, Deribit, Market Volatility, Digital Assets, Financial Markets, Risk Appetite, Trading Volume, Crypto Derivatives, Federal Reserve, BlackRock, CCData, AnB Investments, Amberdata
