- Deribit data show activity in the $200,000 strike bitcoin call, which is nearly three times the cryptocurrency’s going market rate.
- Options open interest has soared to record highs alongside bitcoin’s price rally.
Investors are getting bullish on Bitcoin again, similar to 2021, and are buying options contracts that would profit if the price triples.
On Friday, a lot of money (over $20 million) was invested in Bitcoin call options on Deribit, a leading crypto options exchange. These options have a strike price of $200,000, which is almost three times the current price of Bitcoin ($67,000).
These options expire in December, so basically people are betting that Bitcoin will be above $200,000 by then. Call options give the buyer the right, but not the obligation, to purchase Bitcoin at a specific price (strike price) by a certain date (expiry).
This type of option (deep out-of-the-money or OTM) is relatively cheap because it's less likely to be profitable. It's kind of like a lottery ticket - you risk a small amount (the option premium) for the chance of a big win if Bitcoin's price skyrockets.
The popularity of these options reflects a common belief that Bitcoin's price will surge due to a coming supply reduction event (halving) and increased demand from Wall Street's involvement in Bitcoin ETFs.
Bitcoin recently hit new highs above $69,000 and is currently trading around $67,000, which is a nearly 60% gain so far this year. This rally has also boosted overall activity in the options market for both Bitcoin and Ethereum.
