Derivatives Market: Bitcoin Options Outperform Ether as Trump Omitting Crypto Reference in Inaugural Speech
Persistent Bullish Outlook
As of noon Hong Kong Time, BTC call options, offering a bullish exposure in the leading cryptocurrency, traded pricier than ETH calls across time frames, according to risk reversals tracked by Amberdata. Risk reversals measure the difference between implied volatility for calls relative to puts, with positive values signaling a bullish sentiment.
Bitcoin Options Trading
BTC’s risk reversals show short-term and near-term calls trading at a four to five volatility points premium to puts, indicating a bias favoring short-term bullish exposures. Meanwhile, ETH calls trade at a relatively lesser volatility premium to puts. In other words, the ether-bitcoin ratio is seen extending the downtrend.
Eth-bitcoin Ratio
The ether-bitcoin ratio hit a three-year low of 0.03 early this week. At the same time, a report showing GOP congressional priorities did not include mentions of bitcoin or crypto. Traders on the decentralized betting platform Polymarket now see a 38% chance of Trump announcing a strategic BTC reserve in his first 100 days of presidency, down from nearly 50% a day ago.
No Crypto Mention in Inaugural Speech
The bias favoring BTC is particularly striking given that Trump did not mention the strategic bitcoin reserve on Monday, despite prior rumors suggesting he would. The absence of any crypto reference in the inaugural speech, coupled with the report on GOP congressional priorities, may have led to the erosion of expectations among traders.
Conclusion
In conclusion, the derivatives market appears to be discounting the chances of a significant crypto-related policy announcement from the new administration. While the absence of a strategic BTC reserve may come as a surprise to some, the market seems to be already pricing in a lack of decisive action on this front. However, the risk reversals on Deribit indicate a persistent bullish outlook for BTC, despite the lack of crypto-related momentum from the incoming administration.
FAQs
Q: What is risk reversal in options trading?
A:** Risk reversals measure the difference between implied volatility for calls relative to puts, with positive values signaling a bullish sentiment.
Q: Why are Bitcoin options trading pricier than Ether options?
A:** Short-term and near-term calls trading at a four to five volatility points premium to puts, indicating a bias favoring short-term bullish exposures for Bitcoin.
Q: Will Trump announce a strategic BTC reserve in his first 100 days of presidency?
A:** Traders on Polymarket now see a 38% chance of Trump announcing a strategic BTC reserve in his first 100 days of presidency, down from nearly 50% a day ago.
Q: How did the lack of crypto mention in the inaugural speech affect the market?
A:** The bias favoring Bitcoin is particularly striking given that Trump did not mention the strategic bitcoin reserve on Monday, despite prior rumors suggesting he would.
