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

Bitcoin flashes green as Square converts some of its money into crypto, while Ether options traders place many bets on the December expiration.
Bitcoin (BTC) starts trading at $ 10,890 as of 8:00 PM UTC (4:00 PM ET). Increase of 2.1% in the last 24 hours.
Bitcoin's 24-hour range: $ 10,532 to $ 10,962
BTC above its 10-day and 50-day moving averages, a bullish signal for market technicians.
Bitcoin's price fell Thursday, rising almost immediately after announcing that payment company Square had invested $ 50 million in the purchase of 4,709 BTC. As a result, the price per 1 BTC rose to $ 10,962 before reaching $ 10,890 at press time.
Read more: Square brings 1% of Bitcoin's total assets into a surprise of $ 50 million
Related Topics: Market Reacts to Square's $ 50M Bitcoin Purchase
"The news that Jack Dorsey's Square bought approximately $ 50 million worth of Bitcoin is clearly positive and appears to have propelled the markets higher due to the positive sentiment," said Guy Hirsch, CEO of multi-asset brokerage eToro in the USA. "Dorsey has long been a supporter of the largest cryptocurrency, and this move confirms his and Square's bullish stance." Square's share price (NYSE: SQ) also rose Thursday, closing at a green 1.8% today.
"The fact that traditional institutional companies like Square are investing in Bitcoin to help them keep their balance sheet after a public company like MicroStrategy bought $ 250 million worth of Bitcoin as an 'inflation hedge' gives Bitcoin considerable credibility" said Michael Gord, chief executive officer of trading company Global Digital Assets. "The CEO of MicroStrategy even went so far as to describe Bitcoin as superior to cash."
If these investments are indeed a bet against fiat, the US dollar index (DXY), a measure of the greenback against a mix of other currencies, is a metric to watch. Although it has risen again since a late August low, it is still in the 2020 relative lull, unchanged at a red 0.02% as of Thursday's press.
The positive market sentiment has certainly led to an above-average daily spot volume for Bitcoin. The major exchanges already had a volume of $ 332 million on Thursday, which is above the daily average of $ 284 last month.
Related: Square makes 1% of total Bitcoin assets a surprising $ 50 million investment
While bitcoin volume increased on Thursday, volatility remains low. In the options market, the six-month volatility at the ATM (ATM), the difference between option strikes and Bitcoin prices, is 65%. The last time it was this low was on July 31st.
"The buying pressure from institutional investors is mounting, so we're seeing a nice surge," said Marc Fleury, CEO of Two Prime, a crypto wealth management firm. "We seem to be entering an era of a bull market with low volatility."
Lots of ether options for the December expiration
Ether (ETH), the second largest cryptocurrency by market capitalization, rose around $ 351 on Thursday and rose 3.3% in a 24-hour period at 8:00 PM UTC (4:00 PM ET).
Read more: With DeFi Deflation, Ethereum users will be freed from rising fees
Ether options traders are betting heavily on the price of the asset at the end of the year. Over 473,500 ETH in open positions expire on December 25th, which corresponds to options valued at around USD 166,023.00 at spot prices on Thursday.
Vishal Shah, options trader and founder of the Alpha 5 derivatives exchange, says traders started building ether option positions for December some time ago. "It really started to prepare for DeFi a few months ago," he said. There are two main reasons for option betting, Shah added. "It's either leverage against DeFi or a hedge against inconsistent losses," he said. Volatile loss occurs when an investor contributes to a pool of liquidity and may be temporarily worse off than actually just holding the asset due to protocol imbalances.
Other markets
Digital assets on CoinDesk 20 are mostly green on Thursday. Notable Winners as of 8:00 PM UTC (4:00 PM ET):
Chain link (LINK) + 6.4%
Bitcoin Cash (BCH) + 5.7%
Tezos (XTZ) + 4.2%
One notable loser as of 8:00 PM UTC (4:00 PM ET):
eos (EOS) - 0.46%
Read more: BitMEX CEO Arthur Hayes Leaves Role After US Fees
Shares:
The Asian Nikkei 225 closed in the green at 0.96%, compounded by investor optimism after US President Donald Trump tweeted support for further economic stimulus.
The European FTSE 100 ended the day up 0.53%, led by gains from telecommunications company TalkTalk Group, which gained 17% on shareholder takeover talks.
In the US, the S&P 500 ended the trading day up 0.80% as policy makers continued talks about new economic stimulus.
Raw materials:
Oil rose 3%. Price per barrel of West Texas Intermediate Crude: $ 41.23.
Gold was in the green at 0.37% and at $ 1,894 at press time.
Treasury:
US Treasury bond yields all fell on Thursday. Yields, moving in the opposite direction as price, fell the most over the biennium, falling to 0.147 and into the red of 8.5%.
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Market Wrap: Bitcoin Rises to $ 10.9,000 on Square News; December Ether options pile up
Market Wrap: Bitcoin Rises to $ 10.9,000 on Square News; December Ether options pile up
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