Alexander Blume, founder and CEO of the crypto asset manager Two Prime, stated that the rebound of Bitcoin (BTC) could extend further because institutional investors caught on the incorrect side of volatility trades are being compelled to cover their positions.
During an interview with CoinDesk, Blume explained that market participants have continuously sold Bitcoin call options, keeping implied volatility suppressed and leaving themselves vulnerable when prices jump abruptly. Additional upward movement might force those speculators to hedge or exit their positions, which would provide extra momentum to the uptrend.
Blume noted that a significant volume of short positions remains active, suggesting that selling Bitcoin volatility while it sits at historical lows represents an especially poor strategy.
Both Bitcoin and the broader digital asset sector have recovered over recent weeks, with BTC briefly surpassing $82,000 on Thursday, marking its peak value since May. At the time of publication, the premier cryptocurrency changed hands near $78,500.
Initially, the recovery found strength from declining bond yields, expanded Treasury debt buybacks, and expectations that the Federal Reserve might maintain steady interest rates during September. Furthermore, spot bitcoin exchange-traded funds brought in $731 million on Thursday, representing their highest single-day influx since January, although stronger employment figures released Friday subsequently raised predictions of a rate hike.
Headquartered in New York, Two Prime functions as an institutional bitcoin asset manager and lender catering to corporate treasuries, family offices, miners, and additional investors. Established in 2019, the firm reports access to $3 billion in lending capacity.
Funding rates point to a healthier rally
Despite the rapid acceleration, perpetual-futures funding rates have failed to reach levels typically indicative of excessive leverage or a local peak, according to Blume, implying that speculative positioning does not primarily drive the advance.
He also noted that demand continues to receive support from spot ETF inflows and renewed accumulation by corporate bitcoin holders.
Firms like Strategy (MSTR) and Strive have restarted their acquisitions, establishing a feedback loop where rising valuations enhance these companies’ capacity to secure capital and purchase additional bitcoin.
Blume indicated that implied volatility dropped to roughly 23%-24% during the prior month before climbing into the 40s amidst the surge. Although this represents a substantial jump, it remains relatively low by historical standards for Bitcoin, leaving call sellers exposed if volatility continues to climb.
The $60,000 floor
Blume mentioned that Bitcoin appears to have formed a solid foundation around $60,000, assuming macroeconomic conditions remain steady.
A sharp sell-off across equities and alternative risk assets presents the most significant danger. He warned that if risk assets experience a wider collapse, Bitcoin will decline alongside them.
Persistent headwinds include elevated Treasury yields, rising oil prices, and stubborn inflation. Even so, Blume suggested that widespread pessimism means even mild positive economic announcements could yield disproportionate market reactions.
He anticipates that the Trump administration will prioritize financial stability and advocate for reduced interest rates.
Additionally, Blume referenced prospective adjustments to segments of the personal consumption expenditures price index, forecasting they could yield lower reported inflation figures and bolster a shift in the interest rate outlook.
As crypto market conditions improve, Two Prime experiences positive effects, with Blume noting that lending activity typically scales upward alongside rising bitcoin values.
Meanwhile, bitcoin miners are pursuing varied strategies regarding the sector’s push toward artificial intelligence. While Cipher Mining (CIFR) and TeraWulf (WULF) have shifted most aggressively into AI infrastructure, CleanSpark (CLSK) and MARA (MARA) strive to maintain their core bitcoin operations while simultaneously branching out into AI and power generation.
MARA, which liquidated more than 23,000 bitcoin during the opening half of the year, recently opted to borrow against its remaining reserves rather than execute additional sales. The firm secured $600 million from Coinbase (COIN) and Two Prime in August.
Blume stated that this transaction demonstrates how major mining entities can leverage their bitcoin stockpiles to secure liquidity while maintaining exposure to future price appreciation.
Read more: Crypto faces 3 barriers to next bull run, STS Digital CEO says
Originally published at https://www.coindesk.com/markets/2026/09/03/bitcoin-rally-has-more-room-as-volatility-shorts-unwind-two-prime-ceo-says.
