Key Takeaways:
In a recent Forbes report, it was revealed that Wall Street mega banks are sitting on post-election gains worth $1.4 billion amid the price of Bitcoin (BTC) soaring. The banks piled into BTC futures contracts in the weeks leading up to the highly contested U.S. Presidential election.
Bitcoin futures contracts are financial derivatives that allow traders to speculate about the future price of the flagship cryptocurrency without actually owning it. While federal law prohibits U.S. banks from holding BTC directly, they can still get exposure to its price fluctuations through derivatives and exchange-traded funds (ETFs).
Wall Street Banks Register $1.4 Billion Profit From Selling BTC Futures
According to data provided by the U.S. Commodity Futures Exchange Commission (CFTC) on election day, they amassed a total of 10,564 futures contracts, equivalent to 52,820 BTC, worth $4.76 billion at current prices.
Some prominent banking institutions handling crypto derivatives markets in the US include JPMorgan, Goldman Sachs, and SG Americas Securities.
Long positions from the brokerage units of Wall Street banks amounted to $3 billion at the Chicago Mercantile Exchange (CME), with an average purchase price of $65,800 per contract. As estimated by Forbes, Bitcoin’s remarkable 22% price jump since November 5 has netted paper gains of $1.4 billion to the banks who bet BTC futures.
Open Interest, referring to the total number of outstanding contracts that have not been settled, by banks, jumped $3.5 billion between October 8 and 15, from 1,200 BTC futures contracts ($373 million) to 11,766 contracts ($3.8 billion). Based on current prices, the value of the unclosed contracts is estimated to be worth around $5.3 billion, resulting in a 36% gain for the banks in less than a month.
BTC Records New All-Time High of $93,480 As Investors Grow Optimistic About Trump’s Crypto Policies
Bitcoin (BTC) rallied to a new all-time high of $93,000 on Wednesday as it continues to ride on the wave of optimism surrounding the possibility that President-elect Donald Trump could enact pro-crypto policies in the United States. Crypto investors are hopeful that the former and future president’s reign might pave the way for a more supportive regulatory environment for digital currencies.
Since the elections on November 5, Bitcoin has made significant gains, recording multiple all-time highs. The apex cryptocurrency’s price peaked at $93,480 before settling down at $88,185, marking a 32% rise in seven days. Other cryptocurrencies also experienced significant rallies, with the price of Ether (ETH) rising 37% since Election Day, while leading meme cryptocurrency, Dogecoin (DOGE), which was promoted by Trump’s Department of Government Efficiency (D.O.G.E) head Elon Musk, surging by more than 150%.
Damon Polistina, head of research at crypto investment platform Eaglebrook, highlighted that the condition being observed in the market is investors “hoping or realizing” what it could mean for Bitcoin in the medium to long term. Crypto holders were promised a pro-Bitcoin administration and legislation that would give them the right to self-custody Bitcoin and allow the government to hold it as a reserve asset for the U.S. Treasury.
Trump embraced crypto assets during his campaign, promising to turn the United States into the “crypto capital of the world” and introducing a Bitcoin strategic reserve that will accumulate 2 million BTC as a national stockpile for the government treasury.
Zach Pandl, head of research at Grayscale Investments, said the results of this election will unlock the ability for large and regulated banks, custodians, and exchanges to enhance their operations by adopting public blockchain technology in a way that they haven’t in the past.
Bitcoin development and business intelligence firm MicroStrategy recently revealed that it purchased $2 billion worth of BTC between October 11 and November. The world’s largest corporate holder of Bitcoin reportedly owns 279,420 BTC, worth $24 billion at current rates.
At the time of writing, Bitcoin (BTC) is trading at $89,546 – up 3.06% in the last 24 hours.
Read More: DOGE Price Skyrockets As Trump Announces D.O.G.E.
