Institutions Show Cautious Optimism on Bitcoin, Awaiting CPI and Iran Talks

The recent 7% surge in bitcoin's price to $74,531.55 has not been accompanied by strong conviction, as the recovery has stalled near $72,000 ahead of key risk events, including the US inflation report and US-Iran talks. Institutions are adopting a cautious approach, purchasing call options to bet on potential gains while also buying downside protection. According to QCP Capital, there is demand for the $45 call expiring in May on BlackRock's spot bitcoin ETF, indicating expectations of a price rise above the current $40. Similarly, options on Deribit have seen significant interest in the $80,000 call, but demand for puts, which provide protection against declines, persists. The price differential between calls and puts, measured by options skew, remains negative across all time frames, indicating a lingering bias towards put options. The upcoming US consumer price index for March is expected to show a significant increase in annualized inflation, driven primarily by rising energy prices. This could lead to market volatility, particularly if the core figure exceeds the estimated 2.7% annualized rate, potentially supporting the case for Fed rate increases and weighing on risk assets like bitcoin. The meeting between Iranian and US delegates in Pakistan over the weekend will also be closely watched, as a resolution to the conflict could lead to increased stability in financial markets and accelerate bitcoin's rally. The first signs of this could emerge from Hyperliquid-listed oil perpetual futures. In addition to these events, the ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in US Treasury futures, has shown a decrease in uncertainty around inflation, interest rates, and macro shocks, potentially indicating calmer conditions for crypto markets.