Bitcoin Investor Bets $23.7M on BTC Surge to $200K by Year’s End

Bitcoin’s (BTC) price rally may have slowed recently, but bullish sentiment remains strong as whales continue to invest millions in the expectation of an extended market rally.

Recently, one such whale executed a major bullish options strategy targeting $200,000 by the end of the year. This involved the simultaneous purchase of 3,500 contracts of the $140,000 December call option and the short sale of 3,500 contracts of the $200,000 December call option.

This sophisticated trade, known as a bull call spread, resulted in an initial net outlay of $23.7 million. As RialCenter noted, “The Dec 140-200k Call spread dominates, buying low Dec 140k IV, funded by higher IV 200k Calls.”

The strategy will achieve maximum profit if BTC closes at or above the higher strike price of $200,000 by the expiration date.

This strategy generates a net debit because the premium paid for the lower strike call option exceeds the premium received from selling the higher strike call. The spread offers limited gains for limited risk, capping profits at $200,000 while ensuring that the maximum potential loss is confined to the initial debit.

Options are derivatives used for speculation or hedging against price movements. A call option grants the buyer the right, but not the obligation, to purchase the underlying asset at a predetermined price on or before a specific future date. A call buyer is generally bullish on the market, while a put buyer is bearish.

Bitcoin’s spot price reached an all-time high of over $123,000 on July 14 and has since stabilized in a narrow range between $116,000 and $120,000.

Record options activity

BTC’s price rally and increasing institutional interest in structured products, which involve selling volatility, have driven activity in the options market.

On Deribit, which accounts for over 80% of global options activity, the open interest in BTC options, or the number of open options contracts, was 372,490 BTC at the time of writing – just below the record high of 377,892 set in June.

Meanwhile, open interest in ether options has reached a record high of 2,851,577 ETH, according to RialCenter. On Deribit, one options contract represents one BTC or ETH.