by David Pan and Sidhartha Shukla
Bitcoin options traders are already setting their sights on higher prices as the original cryptocurrency extends its record-breaking rally for a second day.
As Bitcoin breached $116,000 for the first time, the open interest, or the number of outstanding contracts on the Deribit exchange, has become concentrated around Bitcoin call options with $115,000 and $120,000 strike prices. Longer-term options expiring in late September and December have seen elevated open interest at $140,000 and $150,000.
Bitcoin continued its run on Friday, climbing as much as 3.9% to around $118,000. The rally triggered a major unwinding of short positions, with over a billion dollars worth of bets against the token getting liquidated over the past 24 hours, according to data compiled by Coinglass. Investors rushed into Bitcoin ETFs, pouring in a net $1.2 billion on Thursday.
Ether, the second-largest cryptocurrency, jumped as much as 6.4% to $2,999, driven by strong inflows into its US spot ETFs. Investors added $383 million across the group of nine funds — the second-highest daily total on record. Open interest for Ether futures offered by CME Group hit a record, indicating growing institutional interest.
Bitcoin’s breakout, fueled in part by institutional demand, is the latest validation for crypto bulls, who pounced after the November election on bets that the second Trump presidency will usher in a new era of permissive regulation. A Congressional committee declared the week of July 14 as “Crypto Week.” The biggest digital asset by market value is up around 25% this year amid the broader rally in risk assets that has also sent stocks to all-time highs.
“Notably, the options market is reflecting renewed bullish conviction,” said Chris Newhouse, director of research at Ergonia, a DeFi trading firm.
The funding rate, a measure of sentiment, in the Bitcoin perpetual futures market, remains positive, indicating more demand to stay in bullish positions. The contracts are one of the most common ways for crypto traders to leverage their bets on the digital asset.
Bullish comments by President Donald Trump over his Truth Social social media site helped to fuel the optimism Thursday.
The rally is due in part to expectations of rising demand from a spate of recently launched crypto treasury companies, according to Mauricio Di Bartolomeo, co-founder and CSO of Ledn. The companies are seeking to issue shares or debt to load the digital assets on their balance sheet in a bid to become Bitcoin proxies in the stock market.
“Bitcoin has reached a new all-time high on the back of relentless demand from investors and corporations.” Di Bartolomeo said.
Bitcoin’s historic rise comes even as investors grapple with macro headwinds such as increasing tension due to the looming tariffs set to be imposed by the Trump administration in August.
“Bitcoin is showing why it’s in a class of its own.” said Roshan Roberts, chief executive officer of the trading platform OKX US. “As trade tensions flare and altcoins stumble, institutions are treating BTC as a macro hedge and a maturing asset class. July will test markets, but Bitcoin looks built for it.”
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