Bitcoin rally may keep climbing as volatility shorts unwind, Two Prime CEO says
Bitcoin rally may keep climbing
Bitcoin’s price rose to about $78,400 and could rise further, says Alexander Blume, founder and CEO of crypto asset manager Two Prime. He points to investors who sold bitcoin call options – a type of contract that gives the right to buy at a set price – being forced to cover their positions as the market climbs.
Key points
- Call sellers may need to hedge or close positions, adding buying pressure.
- Spot bitcoin exchange‑traded funds (ETFs) – investment products that track bitcoin’s price – saw $731 million of inflows in one day.
- Funding rates on perpetual futures remain low, suggesting limited excessive leverage.
- Bitcoin appears to have a support level near $60,000, assuming broader markets stay stable.
- A sharp sell‑off in equities or other risk assets could pull bitcoin down.
Confirmed facts
- Bitcoin was trading around $78,500 at the time of the article.
- Two Prime has access to $3 billion of lending capacity.
- Implied volatility fell to roughly 23‑24 % last month and rose into the 40 % range during the rally.
- Spot bitcoin ETFs recorded a $731 million one‑day inflow, the largest since January.
- Mining companies such as Marathon (MSTR) and Strive have resumed buying bitcoin.
Remaining uncertainties
The main risk is a broader collapse in risk assets such as equities. Blume notes that if a wider sell‑off occurs, bitcoin could also fall, but the timing and likelihood of such a market move are not known.
Why it matters
If short sellers must cover, their buying can push the price higher. Low funding rates indicate that the rally is not being driven by heavy leverage, which may make the move more sustainable. ETF inflows and corporate treasury buying add extra demand.
Outlook
Blume expects that stable economic conditions will keep bitcoin near its $60,000 floor. He mentions potential policy actions, such as the U.S. administration seeking lower interest rates, could support the market, but no specific timeline is given.
