Bitcoin Options Offer A Safer Choice To Gain Long Exposure From $38,000


Even as Bitcoin prices stay in an extensive trading range, options traders have an opportunity to go for the Iron Condor options strategy to earn maximum profits. Bitcoin had last traded above the $50,000 mark back on December 27 last year. But traders remain positive that inflation had triggered crypto adoption by hitting the required threshold.

The present rate of inflation (8.5%) in the US has created a scenario of an increase in prices by 50% in 5 years. That would essentially bring down the valuation from $100 to $66 as it would lead to a 33% slash in the purchasing power.

A ruling on interest rates is expected on Wednesday (May 4) when the US Fed. Reserve FOMC meet. Even more important the FED might announce a plan to offload a portion of the $9T balance sheet.

It is likely the bank will sell assets worth $95B instead of supporting mortgage and debt markets. There could be strong consequences and the risk markets need to factor in just this scenario.

For example, the small-cap Russell 2000 index has slid by 16.5% in a year. Chinese stocks are also facing a correction by as much as 20% in a year.

It remains unclear what will cause a bull run in the Bitcoin price, but Glassnode reported in mid-April a vast quantity of supply of coins that have accumulated between $38-$45K.

Traders who are optimistic that Bitcoin could reach $50K by July have the low-risk options strategy to cast long-term bullish bets.

Profit In Bitcoin Lies Between $40,500-$60,500 Mark

Traders are considering maximum gains and limiting losses. The iron condor option strategy gives buyers the option to acquire assets at fixed future prices by paying a premium. This option is expected to maximize profits near the $50,000 mark while limiting losses when below $38,000.

The put option, meanwhile, provides buyers the privilege of selling assets at fixed future prices. It is a downside protection method. The iron condor entails selling both put and call options at identical dates and prices.