- In a recent report, a Grayscale researcher reported this Bitcoin call options are a great way to invest in market uncertainty.
- In the middle of the positive economy, Bitcoin has been rising a bit, rising above $65,000.
- BTC is struggling to make headway due to rough moves in ETFs and international tensions.
On July 15, Grayscale, a leading asset management company, highlighted the Bitcoin covered call method as the best way for investors to make money on the uncertainty in the cryptocurrency market.
Covered Phones Turn BTC Stagnation into Money
Although Bitcoin is currently showing signs of recovery, it is expected that the cryptocurrency will trade sideways before it fully recovers. In such cases, a covered call strategy can allow traders to get better yields and ensure the underlying security, according to Grayscale.
Zach Pandl, Director of Research at Grayscale, said in a press release official post“Although we are seeing positive signs, we cannot be sure how the current Bitcoin (BTC) market will move. If the price of Bitcoin has found a solid bottom but trades sideways before recovering, call options can provide a way to help make money from Bitcoin’s volatility by managing price exposure.
In a covered call option, the trader owns the Bitcoin position and, conversely, the seller trades the call options. By doing this, the seller makes money from the price.
In an official post, Grayscale shared a hypothetical example for the end of 2026, where an analyst assumed that Bitcoin’s price around $65,000 and 40% meant volatility. During this period, traders have made an annual yield of about 22%. They will make a return above the breakeven price of $58,500.
“The premium premium provides income and downside protection, in the exchange ceding upside if Bitcoin is very high. If the spot price of Bitcoin falls below the breakeven price, the covered call method loses money, but less than the long term (with the same amount of premium required for the call),” he said in the post.
Grayscale has said that real world BTC ETFs, such as its BTCC fund, use call strategies to achieve similar results.
Bitcoin Rises to 3-Week High on Cold Inflation Data
On July 15, Bitcoin achieved a surge after the recent financial crisis, which helped the cryptocurrency climb above $65,000 for the first time in the last three weeks. On Wednesday, it rose to $65,467. However, the cryptocurrency failed to surpass this level. At the time of this writing, BTC is trading around $64,833 with a spike of 4.13% in the last 7 days, according to CoinMarketCap price. The cryptocurrency has a market capitalization of about $1.3 trillion.
The meeting was witnessed after weaker-than-expected data on US inflation came out, which eased concerns about a quick increase in the Federal Reserve rate.
According to the latest report, June’s Consumer Price Index (CPI) decreased by 0.4% from the previous month, which is the lowest since April 2020. This figure brought the annual price drop to 3.5%. This is much lower than many experts had predicted.
Apart from this, the Producer Price Index (PPI) also experienced a decline, falling by 0.3% on the month.
Although they have made some gains in the past few days, Bitcoin is still struggling to make a break with the bullish trend. The reason for this is the change in BTC ETF prices among investors. On July 14, US spot BTC ETFs recorded a total of about $181 million, according to Father’s side. However, on July 13, it recorded $424.7 million in outflows.
Year over year, US spot BTC ETFs have seen the volume of investment rise to more than $51 billion, with more than 636,000 BTC locked up in ETFs.
The entire crypto market is still experiencing a lot of volatility due to the increasing global volatility in the Middle East due to The US-Iran war. This week, Iran launched new threats and weapons to Middle Eastern countries such as the UAE, Kuwait, Bahrain, and Oman, in response to the US invasion. The attack has also caused economic upheaval as it could disrupt power supplies around the world.
