Bitcoin Traders Hedge Ahead of Jobs Report as Downside Risks Loom
Bitcoin traders are turning defensive ahead of Friday’s U.S. nonfarm payrolls (NFP) release, buying low-cost, far out-of-the-money (OTM) puts on the CME to guard against the risk of a stronger-than-expected jobs report that could weigh on risk assets.
Economists forecast 110,000 new jobs in August, up from July’s 73,000, with unemployment steady at 4.2% and wages rising 0.3%, according to FactSet. But broader signals point to a cooling labor market. Job openings dropped to 7.2 million in July, quits remain muted, and ADP reported private-sector hiring fell sharply to 54,000 from 104,000 the month prior. These trends support the case for Federal Reserve rate cuts, which would typically favor bitcoin.
Still, traders are wary of a surprise. “There’s been robust demand for leveraged downside exposure via 5-delta OTM puts, spread across both short- and long-dated maturities,” said Gabe Selby, head of research at CF Benchmarks. Such options, often viewed as “lottery ticket” hedges, remain relatively cheap and are being used to prepare for sharp downside moves.
Deribit data shows a similar tilt, with short-term puts trading at notable premiums to calls.
Bitcoin was last at $109,950, down 2% on the day, with resistance holding near $112,000.
