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Bitcoin surged to a new all-time high of $81,000, driven by a wave of pro-crypto candidates winning U.S. elections and the Federal Reserve's interest rate cut. With futures premiums soaring, institutional investors are betting on continued growth, marking a significant shift in crypto market momentum post-election.
Bitcoin Futures Surge Post-Election, Fueled by Bullish Investor Sentiment and Fed’s Rate Cuts
Futures premiums skyrocketed as Bitcoin hit a new all-time high of about $81,000, indicating that investors think the record-run in the most prominent cryptocurrency in the world is set to continue on the strength of the U.S. elections, which saw a wave of pro-crypto candidates win office.
On the well-known Deribit derivatives market, one of the few cryptocurrency-native platforms that allows futures trading, open interest in bitcoin's price topping $90,000 increased to almost $2.8 billion, per CNBC. Deribit includes the majority of the offshore options market.
“The options market’s bias is heavily toward continued momentum. Call options trade at a premium to puts, and open interest in out-of-the-money calls has grown,” Vetle Lunde, head of research at K33 Research, told CNBC.
A call option grants the buyer the right to purchase shares of the underlying asset at a specific price for a predetermined time. Purchasing a call option is a wager that the asset's value will increase while buying a put option is a wager that the asset's value will decrease.
Institutions in the United States frequently place bets on the future price of bitcoin through the CME derivatives exchange, which sells bitcoin futures contracts. Velde informed CNBC that the average CME premiums for Bitcoin and ether on November 8 were 14% and 14.5%, respectively. Velde claims these premiums were 7% before the election and had hovered below 10% for most of the previous six months.
“The recent surge is a meaningful deviation higher emphasizing the bullish flows of late,” he added, noting that yields more or less stabilized well into the double digits after the election became clear.
“Alongside the growth in leverage, we saw the first meaningful example of growing yields in offshore derivatives, indicative of the move being led by determined risk-takers positioning for further upside,” said Velde.
Perpetual swaps, which let purchasers speculate on where they believe prices are going without a defined expiration date, saw a significant increase in open interest during the early stages of Bitcoin's upward trend.
However, because neither CME futures nor ETFs are open for weekend trading, liquidity in cryptocurrency markets is usually worse than during the week. As a result, Velde claims that swings tend to overreact and significantly retrace once these markets reopen.
During his campaign, President-elect Donald Trump pledged to make the US the "crypto capital of the world." His many promises to the cryptocurrency community were cutting interest rates and establishing a national cryptocurrency stockpile using the more than $16 billion in bitcoin that the US government had accumulated through asset seizures. A spike in cryptocurrency prices usually coincides with monetary policy easing since it lowers borrowing costs.
Fed Rate Cuts and Pro-Crypto Election Wins Drive Surge in Cryptocurrency and Fintech Stocks
The Federal Reserve determines the benchmark rate, which directs the nation's monetary policy and functions independently of the White House by design. On November 7, the Fed authorized its second straight interest rate decrease.
The cryptocurrency market saw a general upswing into the weekend due to the election results and the Fed's unanimous decision to lower the benchmark rate once more.
With a 30% increase over the previous seven days, ether overtook bitcoin in value, and on November 10, Solana's market capitalization surpassed $100 billion.
The market capitalization of all spot bitcoin ETFs has surpassed $80 billion, and the spot funds have added $2.3 billion in the last three trading days alone.
Following the victory of candidates backed by the cryptocurrency industry in contests up and down the ballot, fintech companies with a crypto affiliation were among the best performers.
Coinbase's stock surged 48% for the week, the most since January 2023. With almost $75 million donated to Fairshake and its affiliated PACs, including a new vow of $25 million to fund the pro-crypto super PAC in the 2026 midterm elections, Coinbase was one of the leading corporate donors during the election season.
Trump has promised to fire SEC Chair Gary Gensler, which could help businesses like Coinbase that are suing the agency for suspected securities violations.
“Tuesday night was certainly a big night for crypto and the crypto voter,” Coinbase’s chief legal officer Paul Grewal said in an interview. “We’re going to have the most pro-crypto Congress ever, and Coinbase has played some part in all of that.”
For the week, Robinhood, a platform that lets users buy and sell various digital currencies, increased by 27%, and in May, the SEC issued a Wells Notice to the online brokerage, which frequently comes before official charges.
The general manager of Robinhood's cryptocurrency division told CNBC that the company wants to collaborate with the government.
“If you think about crypto, it’s a very fast-moving pace. It’s complicated, it was made by engineers, for engineers,” said Johann Kerbrat, the Vice President and General Manager of Robinhood Crypto. “We want to help policymakers to understand it and help them drive the right protections for the customers.”
