HomeNewsOptimize Bitcoin Investments Through Call Options, Matrixport Advocates

Optimize Bitcoin Investments Through Call Options, Matrixport Advocates

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  • Matrixport suggests that low volatility, which has led to cheaper option prices, makes bullish Bitcoin call options a strategic move for investors.
  • Despite the muted market behavior during summer, switching to call options enables investors to participate in potential upside rallies, locking in year-to-date gains.

Matrixport, a leading crypto services provider, is championing a strategic shift for Bitcoin enthusiasts: transitioning from Bitcoin holdings to bullish call options. According to Matrixport, this move could optimize returns, particularly as lower volatility has rendered option prices more affordable.

Making Strategic Shifts in the Crypto Landscape

In the tranquil crypto market landscape characteristic of summer, trading volumes and volatility have experienced significant dips. Matrixport’s Head of Research and Strategy, Markus Thielen, believes these conditions create a ripe opportunity for Bitcoin holders.

“Considering the lower volatility leading to cheaper option prices, it would be strategic for investors to transition from Bitcoin spots to Bitcoin options, particularly upside calls,”

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Thielen remarked.

Notably, this strategic move allows investors to secure the year-to-date gains for Bitcoin. Simultaneously, the exposure to call options opens up avenues to participate in any potential upside rally.

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Matrixport, which has maintained a bullish outlook on Bitcoin since late 2022, underlines the pivotal role of call options in maximizing returns. Call options afford traders the right (but not the obligation) to purchase Bitcoin at a stipulated price by a specific date. Therefore, a call buyer essentially holds a bullish outlook on the market.

The Volatility Advantage

The volatility of an asset is a critical component in the pricing of options. In situations where volatility is abnormally low, options are deemed cheap, making it the prime time for traders to purchase options. Currently, Bitcoin’s 30-day realized or historical volatility has dwindled to an annualized 28%, the lowest since January, marking an opportune moment for call option purchases.

Thielen’s advisory to clients suggests capitalizing on Bitcoin’s YTD gain of 77% and reallocating the freed-up capital to purchase an at-the-money (ATM) call option with a notional value of 3% every month. This strategic ‘Bitcoin replacement strategy’ ensures continuous exposure to Bitcoin’s upside opportunity while simultaneously locking in the year’s gains. Consequently, even in a market downturn, investors would still end the year with a net gain of around 62%.


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Jack Williams
Jack Williams
As a Blockchain Analyst, I specialize in analyzing the performance of decentralized systems and optimizing their efficiency. Through data analysis, I provide insights on blockchain technology, smart contracts, and cryptocurrencies to help businesses make informed decisions and improve their operations.
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