As President-elect Donald Trump prepares for his second inauguration on January 20, 2025, the Bitcoin derivatives market is signaling increased expectations for volatility. Trump, who will become the second U.S. president to serve non-consecutive terms, is set to usher in a pro-crypto administration that could significantly impact the market.

Data from Derive.xyz shows that Bitcoin put options now account for 40% of all open interest, doubling from 20% just a week ago. This shift suggests traders are hedging against potential downside risks ahead of the inauguration.

“Traders are positioning for increased volatility,” said Sean Dawson, Head of Research at Derive.xyz. “The climb in Bitcoin’s options implied volatility reflects market uncertainty as we approach this significant political event.”

Bitcoin and Ethereum Markets Prepare for Swings

Implied Volatility Rising for BTC and ETH

Bitcoin’s implied volatility (IV), a measure of market expectations for price swings, has risen in the past week:

• Seven-day IV: Up 3% to 56.5%.
• 30-day IV: Increased by 1.5% to 57.5%.

Ethereum traders are anticipating even greater fluctuations:

• Seven-day IV: Surged by 6% to 74%.
• 30-day IV: Climbed by 2.5% to 69.5%.

“Ethereum’s higher sensitivity to macroeconomic shifts and speculation surrounding Trump’s post-inauguration policies is driving this disparity,” Dawson explained.

Increased Derivatives Activity

The derivatives market has seen a notable uptick in trading volumes. Bitcoin options open interest reached $237 million in the past 24 hours, with calls comprising 38% and puts 37.3% of contracts. Traders appear divided, preparing for both upward and downward price movements.

Bitcoin is currently trading at $96,714, up 0.5% in the last 24 hours, reflecting cautious optimism in the spot market.

2025 Predictions: A ‘Golden Decade’ for Crypto?

HashKey’s Forecasts for Bitcoin and Beyond

As market participants navigate the short-term volatility, longer-term predictions remain overwhelmingly bullish. According to HashKey Group, 2025 could be pivotal for the cryptocurrency market.

Key forecasts include:

1. Bitcoin reaching $300,000 and Ethereum surpassing $8,000, driven by increasing institutional inflows.
2. A tripling of the total crypto market cap to $10 trillion.
3. Growth in decentralized exchanges (DEXs), leveraging AI and meme-driven engagement to compete with centralized exchanges (CEXs).
4. The market cap of stablecoins rising from $215 billion to $300 billion, as demand for compliant, yield-bearing digital dollars grows.

HashKey also predicts the approval of new ETFs, including those for XRP and SOL, alongside regulatory clarity under Trump’s administration, which is expected to establish a Bitcoin strategic reserve.