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(Bloomberg) — With Treasuries sinking and the dollar falling this year, Bitcoin and gold are again being touted as hedges against currency debasement.
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Yet in the options market, the great debasement trade is splitting in two. Gold traders are pushing their targets higher with little protection against a reversal. Bitcoin traders are pushing higher too, but hedging against a fall.
The divide is particularly stark around Sept. 18, a major expiry two days after the Federal Reserve’s next rate decision. In SPDR Gold Shares, more than five bullish call options were outstanding for every put, which typically offers protection against a decline. In BlackRock’s iShares Bitcoin Trust, the ratio was closer to four calls for every three puts.
That is the fault line inside the debasement trade, the idea that heavy government borrowing and loose monetary policy will diminish the value of the dollar over time. Gold and Bitcoin may be responding to the same macro fears, but investors are not positioning for them in the same way.
Gold traders have steadily shifted their targets higher, and the preference for calls extends well beyond the Fed meeting into longer-dated options. Bitcoin traders have raised their sights too, while also building substantial protection near current prices.
“Gold investors continue to lean bullish State Street Investment Management. The volatility skew “remains firmly bid for calls versus puts across both short-dated and long-dated tenors,” he said
For the gold ETF, about $75.8 billion of notional options are due to expire on Sept. 18, by far the biggest expiry on its calendar, according to data compiled by Bloomberg. The Bitcoin fund has about $5.8 billion expiring that day, its largest expiry of 2026.
Of the two, gold’s bullish options tilt is more persistent and less tied to a single event, with investors also recently purchasing calls in October and into next year. It also has a buyer Bitcoin lacks: central banks, whose purchases provide a
Griffin Ardern, co-founder and options portfolio manager at Primal Fund, said that official-sector buying gives bullion an underlying’s options market
Source: finance.yahoo.com