Bitcoin’s Bullish Surge: Navigating FOMO with Strategic Plays
As Bitcoin (BTC) continues its impressive climb, soaring above $126,000 this October, many investors are experiencing a classic case of FOMO, or the fear of missing out. The cryptocurrency’s recent performance has caught the attention of traders worldwide, leaving those who missed the initial rally scrambling to find ways to capitalize on the momentum. As October is traditionally a bullish period for Bitcoin, analysts have suggested several strategic plays for those eager to join the ride without diving in recklessly.
Understanding Call Spreads
One of the favored strategies among analysts is the use of call spreads, a relatively conservative approach that allows investors to tap into Bitcoin’s potential upside. Markus Thielen, the founder of 10x Research, advocates for buying higher strike out-of-the-money (OTM) calls or call spreads. According to Thielen, purchasing 1–2 month OTM calls or call spreads, such as a $130,000/$145,000 combination, enables traders to benefit from further price increases without incurring excessive costs from implied volatility.
For those unfamiliar with options trading, a call option grants the buyer the right, but not the obligation, to purchase an asset at a predetermined price before a specific date. A bull call spread involves buying a call option at a lower strike price and selling another at a higher strike price, both with the same expiration. This technique, as suggested by Thielen, helps limit potential profits but also reduces the trade’s upfront cost, capping the maximum loss to the net premium paid if the market takes an unexpected dip.
The Risk-Reward Balance
While the bull call spread is an attractive option for those seeking to balance risk and reward, it’s essential to recognize the potential for sudden market corrections. Profit-taking activities could trigger unexpected downturns, even as Bitcoin’s rally is expected to continue through the year’s end. However, this strategy’s design inherently limits losses, making it an appealing choice for cautious traders.
Lin Chen, Deribit’s Asia Business Development Head, noted that traders are increasingly booking call spreads through block trades. “Flows are dominated by large blocks of call spreads, either very long-dated (Sep 2026) or very short-dated, likely monthly ones,” Chen mentioned. He also highlighted the prevalence of profit-taking, illustrating the market’s dynamic nature and the importance of strategic planning.
Financing Call Spreads with Puts
Another innovative approach to gaining bullish exposure while minimizing initial costs is financing call spreads with puts. Greg Magadini, Amberdata’s director of derivatives, recommends this strategy, which involves selling lower strike OTM put options to fund the purchase of multiple call spreads. This approach helps mitigate the term structure vol expense while still capturing potential upside.
However, investors must be aware of the risks associated with this method. Selling put options obligates the seller to purchase Bitcoin at the put’s strike price if the market falls below that level, potentially incurring significant losses if Bitcoin’s price declines sharply. While the bull call spread caps losses from the call side, the short put leg introduces additional downside exposure that can surpass the initial credit received.
Despite these risks, Magadini points out that Bitcoin calls, especially those with longer durations, tend to be cheaper than put options. This pricing discrepancy offers an opportunity for savvy traders to leverage the market’s dynamics to their advantage.
Long-Term Perspective: Buy and Hold
For those less inclined towards complex trading strategies, the traditional buy-and-hold approach remains a viable option. Historically, this method has proven highly rewarding, with Bitcoin’s price skyrocketing from a mere $1 in 2011 to over $120,000 today. This strategy requires patience and a long-term vision but has consistently delivered substantial returns for committed investors.
In conclusion, as Bitcoin continues its bullish trajectory, traders must weigh their options carefully, considering both the potential rewards and inherent risks. Whether opting for strategic call spreads, financing with puts, or embracing a buy-and-hold philosophy, the key is to approach the market with a well-informed, balanced strategy. As always, the dynamic nature of cryptocurrency trading demands vigilance and adaptability, ensuring that investors can navigate the thrilling world of Bitcoin with confidence.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
