Bitcoin Traders Hedge Ahead of U.S. Jobs Report With Cheap Puts

Bitcoin traders are positioning defensively ahead of Friday’s U.S. nonfarm payrolls (NFP) release, scooping up inexpensive out-of-the-money (OTM) puts on the Chicago Mercantile Exchange (CME) to guard against the risk of a strong jobs report that could weigh on risk assets.

Economists expect payrolls to show 110,000 jobs added in August, up from July’s 73,000, with unemployment steady at 4.2%, according to FactSet. Average hourly earnings are projected to rise 0.3%, matching July’s pace.

Recent labor data paints a mixed picture. Job openings dropped more than expected to 7.2 million in July, while the quit rate remained subdued—both signaling softer wage pressures. Meanwhile, ADP’s private-sector report showed just 54,000 new jobs in August, down sharply from 104,000 in July. That backdrop has strengthened expectations for Federal Reserve rate cuts, a potential tailwind for bitcoin and other risk assets.

Still, traders are bracing for a surprise. “We’ve seen robust appetite for leveraged downside exposure through 5-delta OTM puts,” said Gabe Selby, head of research at CF Benchmarks. “The breadth of demand suggests the market is recalibrating around asymmetric risks, with even a modestly stronger print seen as a threat to rate cut bets.”

OTM puts, sometimes dubbed “lottery ticket” hedges, are cheap relative to at-the-money options, making them popular for guarding against sharp price swings. Unlike in past pre-NFP sessions, this time demand spans both short- and long-dated maturities.

Data from Deribit, the world’s largest crypto options venue, also shows downside bias, with short-term puts commanding premiums over calls.

Bitcoin recently traded at $109,950, down 2% in 24 hours. The rebound from weekend lows stalled above $112,000, reinforcing the $112,000 zone as key resistance.