Bitcoin-based options trading has swelled as institutional investors bank on the asset’s continual rise amid a broader crypto market rally triggered by the re-election of pro-crypto President Donald Trump. 

Amid record-setting prices in crypto, Bitcoin’s open interest for options contracts soared on Monday to just below $25 billion, data from derivatives exchange Deribit shows.

It follows the exchange’s previous yearly open interest peak for the asset at roughly $24 billion, seen November 7, immediately following Trump’s victory last week.

Options are a type of financial derivatives contract that allows a buyer to buy or sell an asset at a predetermined price within a particular time frame. Options open interest refers to the number of outstanding non-closed or liquidated options contracts that have been traded. 

The ballooning of Bitcoin options open interest suggests institutional investors are increasingly bullish on Bitcoin, which would be a boon for the asset, experts told Decrypt. 

Institutional players’ “direct and active” participation in the derivatives market could also spur market liquidity, which, in turn, could help push up its price. 

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Author: Liz Napolitano