Bitcoin traders are gearing up for potential market turbulence as the U.S. jobs report looms, with many turning to hedging strategies to mitigate risk. The anticipation surrounding the August nonfarm payrolls (NFP) report, due this Friday, has led to a surge in purchasing far out-of-the-money put options on the Chicago Mercantile Exchange (CME). This move signals a growing unease about an unexpectedly robust jobs report that could trigger a sell-off in riskier assets, including Bitcoin.
Traders Hedge Against Positive Jobs Data
The consensus among analysts predicts a modest increase of 110,000 jobs for August, a step up from July’s 73,000, with the unemployment rate holding steady at 4.2%. However, surprises are not unheard of in these reports, and the recent Job Openings and Labor Turnover Survey (JOLTS) showed a more significant drop in job openings than anticipated, hinting at a cooling labor market.
In this atmosphere of uncertainty, traders are hedging their bets. “We’ve seen robust appetite for leveraged downside exposure through 5-delta, out-of-the-money puts,” remarked Gabe Selby, head of research at CF Benchmarks, in a conversation with CoinDesk. “This positioning signals investors are bracing for the possibility of an upside surprise in August’s NFP report that could re-anchor the Fed’s focus on inflation and reduce the odds of rate cuts this year.”
These put options, while cheap, present a potentially lucrative safeguard against a downturn. They allow traders to sell Bitcoin at a predetermined lower price, providing insurance against market declines. This cautious approach mirrors trends seen in other cryptocurrencies, as noted in BNB Slips Below $860 as Traders Brace for U.S. Jobs Data.
Market’s Mixed Reactions
The landscape is further complicated by recent data from ADP’s private sector employment report, which indicated a sharp drop in job additions from July to August. While this could bolster hopes for Federal Reserve rate cuts—a generally bullish signal for asset prices—it also adds a layer of unpredictability to the forthcoming NFP numbers.
On platforms like Deribit, the world’s largest crypto options exchange, there’s visible anxiety. Short-term puts are trading at a premium compared to calls, as noted by Amberdata’s risk reversal metrics. This suggests a market sentiment skewed towards caution. For a broader perspective on market reactions, see Bitcoin Treads Water, Gold Extends Gain as U.S. Jobs Report Looms: Crypto Daybook Americas.
Despite these hedging maneuvers, Bitcoin’s price remains volatile. At the time of writing, BTC is trading at $109,950, down 2% over the past 24 hours. This decline follows a brief recovery earlier in the week, which faltered at the $112,000 mark, underscoring that level as a significant resistance point.
Looking Ahead
The upcoming NFP report could reshape expectations. A stronger-than-expected jobs number might dampen hopes for near-term Fed rate cuts, thus applying downward pressure on Bitcoin prices. Conversely, a weaker report could spur optimism for easing monetary policies.
As traders navigate these choppy waters, the broader implications for the crypto market remain an open question. Will the Fed’s next moves hinge on these labor figures? And how will Bitcoin’s notoriously fickle market respond to the shifting economic signals? These questions linger, as the crypto community braces for what’s next.
Source
This article is based on: Bitcoin Traders Brace for NFP Shock With Hedging Plays
Further Reading
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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.
