Market Wrap: Bitcoin Surges on Square News to $10.9K; December Ether Options Pile Up

Oct 8, 2020 at 20:31 UTC.Bitcoin is flashing green as Square converts some of its cash to crypto while ether options traders are making lots of bets for December expiration.

Bitcoin trading around $10,890 as of 20:00 UTC. Gaining 2.1% over the previous 24 hours.

Bitcoin's price popped Thursday, led higher almost immediately following the announcement that payments firm Square had invested $50 million to purchase 4,709 BTC. The development pushed the price per 1 BTC to as high as $10,962 before settling to $10,890 as of press time.

"Seeing traditional institutional firms such as Square invest into bitcoin to hold on their balance sheet after a publicly traded company such as MicroStrategy purchased $250 million worth of bitcoin as a 'hedge against inflation' brings significant credibility to bitcoin," said Michael Gord, chief executive of trading firm Global Digital Assets.

"The CEO of MicroStrategy even went so far as to call bitcoin superior to cash".

The positive market sentiment has certainly translated into higher-than-average bitcoin daily spot volume.

While bitcoin volume is up Thursday, volatility remains low.

In the options market, six-month at-the-money volatility, the difference between option strikes to the price of bitcoin, is at 65%. The last time it was that low was back on July 31."The buy pressure from institutional investors is increasing, so we are seeing a nice ramp up," said Marc Fleury, CEO of Two Prime, a crypto asset management firm.

Ether, the second-largest cryptocurrency by market capitalization, was up Thursday trading around $351 and climbing 3.3% in 24 hours as of 20:00 UTC.Ether options traders are heavily betting on the asset's price at the end of the year.

Vishal Shah, an options trader and founder of derivatives exchange Alpha 5, says traders started piling up ether options positions for December a while ago.