Optimize Your Returns in the Crypto Market with Bitcoin Options
Lower volatility in the crypto market has led to cheaper option prices, making it an ideal time for crypto traders to consider rotating their money out of bitcoin and into bullish call options. Markus Thielen, head of research and strategy at Matrixport, suggests replacing bitcoin spot with Bitcoin options, particularly upside calls, to lock in year-to-date gains while participating in any potential upside rally.
Key Points:
- Matrixport recommends rotating money out of bitcoin and into bullish call options
- Lower volatility has made option prices cheaper
- Call options allow traders to buy bitcoin at a stated price by a specific date
- Options prices are influenced by strike, time to expiration, interest rates, and implied volatility
- A positive correlation has developed between implied volatility and bitcoin’s price
According to Thielen, by pocketing bitcoin’s year-to-date gain of 77% and using the freed-up capital to buy an at-the-money call option with a notional value of 3% every month, investors can still end the year with a 62% net gain even if the market drops. This strategy allows for continuous exposure to the upside opportunity of bitcoin while also locking in gains.
Hot Take:
With lower volatility and cheaper option prices, now is the time for crypto traders to consider optimizing their returns by rotating their money into bullish call options tied to bitcoin. This strategy allows for potential gains while also protecting against downside risk, ensuring a net gain even if bitcoin prices retrace from current levels.
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