Bitcoin’s Drop Below $59,000 Fuels Surge in Put Options
Bitcoin and other risk assets, including technology stocks, have come under pressure amid macroeconomic uncertainty and weakness in the Nasdaq. Investors have turned to put options for protection. Options activity in BlackRock’s iShares Bitcoin Trust ETF, or IBIT, has become a key gauge of institutional sentiment because of the fund’s size and liquidity.
The source material did not specify the exact date. On the day of the report, a sharp drop in Apple shares dragged the Nasdaq lower, while Bitcoin fell below $59,000 intraday and touched a low of $58,115. IBIT options volume doubled from its previous level, with put-option premiums reaching $144 million, signaling stronger hedging demand and increasingly bearish sentiment.
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The history behind this eventBitcoin Traders Buy Puts to Hedge Against Slide to $52,000
As Bitcoin approaches its 2024 lows, markets are concerned that a hawkish U.S. Federal Reserve and a stronger dollar will weigh on risk assets. Traders are turning to put options to lock in selling prices, with strikes from $52,000 to $50,000 emerging as a key range for gauging downside risk.
Demand for short-dated puts has risen sharply in the Bitcoin options market, with traders concentrating bets on a potential drop to $52,000 and some positions extending as low as $50,000. Gold futures, meanwhile, have flashed a “death cross.” Fed policy and the dollar's trajectory continue to drive hedging positions, indicating that the market is paying more for protection against another selloff.
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