S&P 500 call options volume surges to record $2.6 trillion. Here’s what it means for bitcoin
As Wall Street chases upside in stocks like never before, the implications for bitcoin appear bullish, though with an important caveat.
What to know:
- Record volumes of bullish S&P 500 call options, totaling about $2.6 trillion in notional value, signal a surge in speculative risk-taking on Wall Street.
- The frenzied trading offers bullish cues to crypto, as the two are positively correlated.
- On a deeper level, frenzied trading in calls points to speculative mania that could suddenly end, breeding downside volatility across financial assets, including bitcoin.
On Wednesday, U.S. equity derivative exchanges registered a notional volume of $2.6 trillion in S&P 500 call options, according to data tracked by Zero Hedge. That amounted to 60% of total S&P 500 options activity. To put it into context, the notional amount nearly matched the total crypto market valuation of $2.73 trillion, which represents the combined capitalization of thousands of cryptocurrencies, with bitcoin leading the way.
In essence, the majority of market participants were positioned for upside through calls or bullish exposure.
On the surface, the implication for bitcoin is straightforward: it is bullish. A speculative surge in the S&P 500 could spill over into crypto, driving valuations higher. After all, double-digit gains in the S&P 500 and Nasdaq since early April played a big role in lifting bitcoin to $80,000 from under $70,000 a few weeks ago.
