Binance’s recent legal challenges, marked by its CEO Changpeng “CZ” Zhao stepping down and pleading guilty, are not deterring crypto traders. Instead, there’s a notable surge in the options market, particularly in topside Bitcoin call options, indicating a prevailing bullish sentiment.
According to Paradigm, an over-the-counter institutional cryptocurrency trading network, traders are actively engaging in topside Bitcoin call options, with a specific focus on March 2024 expiry calls. Despite Binance’s $4.3 billion settlement, the market shows a robust demand for these call options.
Market data reveals significant activity, such as 550 contracts for a BTC $45,000 strike call option expiring in March 2024 on Deribit. The buyers, anticipating a continued Bitcoin price rally, paid a total premium of $1.5 million for these optimistic bets.
A call option is essentially a contract where the buyer has the right to purchase the underlying asset at a predetermined price on or before a specific date. This surge in call options indicates a prevailing bullish outlook among traders.
The positive call-put skews, showcasing higher premiums for both short-term and long-term calls relative to puts, suggest that the market doesn’t foresee a substantial negative impact from Binance’s guilty plea. Traders seem optimistic that U.S. regulators’ actions will pave the way for industry clean-up, potentially leading to the approval of the first U.S.-based exchange-traded fund (ETF) for cryptocurrencies. This spot-based ETF is anticipated to attract significant investor funds into the crypto market.
This information is not legal advice. Do your own research before making any decisions. Only invest what you can afford to lose and seek independent financial advice if needed. Understand the risks involved before purchasing any cryptoassets.