Bitcoin Traders Hedge as U.S. Jobs Report Nears
Bitcoin traders are positioning defensively ahead of Friday’s U.S. nonfarm payrolls (NFP) release, scooping up cheap far out-of-the-money (OTM) puts on the Chicago Mercantile Exchange (CME). The strategy reflects concern that a stronger-than-expected report could weigh on risk assets and stall Fed rate cut expectations.
Consensus forecasts call for 110,000 new jobs in August, up from 73,000 in July, with unemployment steady at 4.2% and wages rising 0.3%, according to FactSet. Recent data, however, suggest labor market cooling: job openings fell to 7.2 million in July, quits remain subdued, and ADP private payrolls dropped to 54,000 from 104,000 the prior month.
Despite the softening backdrop, hedging demand is rising. “There’s been robust appetite for leveraged downside exposure via 5-delta OTM puts, across both short- and long-term maturities,” said Gabe Selby, head of research at CF Benchmarks. Such options, often used as “lottery ticket” hedges, remain inexpensive relative to near-the-money contracts.
Deribit data echo the caution, with short-term puts priced at premiums over calls.
Bitcoin was last trading at $109,950, down 2% in 24 hours, with $112,000 acting as stiff resistance.
