🛸 Bitcoin Options Punters Expect $80k Rally

Good Morning!

Here's what's cooking in the global markets this week: Japan's political shake-up has sent the yen tumbling to three-month lows after the ruling coalition lost its parliamentary majority. Meanwhile, Wall Street's about to get spicy with tech titans Microsoft, Meta, Apple, Amazon, and Alphabet all dropping their Q3 report cards. Adding to the mix, we've got the UK's fresh-faced Labour government unveiling their first budget on Wednesday. Rounding out the week, we're watching the ECB's next moves as they digest eurozone Q3 GDP and inflation data. Mark your calendars for November's heavy hitters too - the U.S. election (Nov 5), Fed's policy call (Nov 7), and the always-exciting jobs report (Nov 1).

In today’s email:

• Options: BTC options traders increasingly bettings on a rally to $80k

• Bitcoin: Still around $68k, consolidation continues into elections

• Hong Kong: Plans to extend tax breaks for crypto investments

• Gold: Holding up around $2730+ as central banks keep buying 🚀

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THE BIG IDEA

Bitcoin options traders are increasingly betting on a rally to $80,000 by late November, with optimism fueled by the upcoming U.S. presidential election and current market dynamics

The open interest for call options expiring on November 29 is concentrated around the $80,000 strike, indicating a strong topside bias. Analysts suggest Bitcoin could thrive regardless of the election outcome, as both candidates have shown varying degrees of crypto support:

Trump is seen as a pro-crypto candidate, while Harris has expressed willingness to implement a regulatory framework that could benefit the industry. Recent trading activity supports the bullish sentiment. Bitcoin tested $70,000 earlier this week before retreating to around $67,100, still up about 60% year-to-date.

The put-to-call ratio is dropping as more traders opt for calls, reflecting anticipation of upward momentum

The most popular strike prices for upcoming options include $75,000 for November 8 and $80,000 for November 29, with $100,000 attracting longer-term interest for late December.

Premiums on call options are higher than those for puts, indicating that traders are more focused on capturing potential gains rather than hedging against declines. According to FalconX's David Lawant, this trend shows investors leveraging the options market to capitalize on potential upside. At the same time, positioning has been active at $68,000 and $66,000 strikes, suggesting traders are prepared for both upward moves and possible fluctuations around the election.

Despite muted volatility compared to other events like ETF launches, analysts expect a potential shift as November 5 approaches. While Bitcoin’s outlook appears strong, there is less consensus on how altcoins might react, especially if broader regulatory changes come into play. In sum, traders seem ready to ride a potential rally, no matter the election's outcome.

MARKETS AT A GLANCE

TOP NEWS

The ECB's unified front is showing cracks as policymakers clash over the timing and size of upcoming rate cuts

The ECB's harmony is hitting some sour notes, with 19 out of 26 officials voicing diverse views on what's next. Markets are betting on rate cuts this December, but can't decide between a modest 0.25% or a bolder 0.50% move. While hawk Joachim Nagel urges patience, dove Mario Centeno's pushing for bigger cuts, citing Europe's decade-long battle with low inflation.

Oil prices take a nosedive as Israel's calculated strike on Iran keeps oil infrastructure intact

Global oil markets breathed a collective sigh of relief Monday, with Brent crude tumbling 4.34% to $72.75 and WTI dropping to $68.52. Israel's weekend strikes on Iran – deliberately avoiding oil facilities – coupled with rising global production from the U.S., Canada, and even smaller players like Senegal, points to an oversupplied market ahead.

Hedge funds are shaking up Europe's dividend derivatives market as traditional players step back

A fascinating shift is happening in Europe's dividend market: multi-strategy hedge funds are muscling in as structured product issuance dwindles. Euro Stoxx 50 dividend futures have hit their lowest levels since 2010, but don't be fooled – it's not a decline in dividend trading, just a transformation in how the game is played.

CRYPTO

Bitcoin's bullish outlook faces headwinds as the copper-to-gold ratio hits concerning lows despite China's stimulus efforts

Despite Bitcoin hovering near $68k and Trump's potential pro-crypto presidency looming, there's a catch: the copper-to-gold ratio has plunged 15% this year to late-2020 levels. This historically reliable economic health indicator suggests market optimism might be overlooking some serious economic warning signs.

Metaplanet has become Asia's largest Bitcoin holder, surpassing 1,000 BTC after acquiring 156.78 BTC for $10.4 million

The company's total Bitcoin holdings now value around $68.8 million, with unrealized gains exceeding $6 million. CEO Simon Gerovich indicated plans for further Bitcoin acquisitions to strengthen Metaplanet's position, following its strategic reserve shift earlier this year.

Hong Kong plans to extend tax breaks for crypto investments and issue more trading platform licenses by year-end

Financial Secretary Christopher Hui announced at Hong Kong Fintech Week that tax concessions for privately offered funds and family offices will soon include crypto assets. The city, which began licensing crypto platforms in 2023, aims to boost market appeal by expanding regulatory incentives. More licenses are expected soon, and stablecoin legislation is set for introduction this year.

Bitcoin ETFs are closing in on the 1M BTC milestone as November's potential catalysts line up

U.S. spot Bitcoin ETFs are eyeing a major milestone: 1 million BTC in holdings, needing just $301 million daily inflows this week to hit the target. With November bringing the U.S. election, potential Fed rate cuts, and Russia's mining green light, bulls are watching closely as holdings reach 976,893 BTC ($66.2B).

GOLD

Mohamed El-Erian attributes gold's record surge to global diversification away from the US dollar

El-Erian noted that gold’s rise to $2,758 reflects central banks’ gradual shift from dollar reserves and the dollar payment system amid geopolitical risks. Factors like Russia’s trading resilience outside Swift and increasing yuan transactions highlight this trend. Additionally, concerns over US consistency in international matters have accelerated the move toward gold as a safer asset.

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