Unlocking the Animal Spirit: Traders Bet $20M on Bitcoin’s $200K Call Option
The Spike in $200,000 Strike Bitcoin Call Activity Signals Resurgence in Investor Interest
A recent report from Deribit shows that the digital currency market is experiencing a renewed interest in bitcoin options. One particular option that has gained significant attention is the $200,000 strike bitcoin call, which is currently holding a notional open interest of over $20 million - triple the current market rate for bitcoin.
This surge in options activity is reminiscent of the bullish animal spirits that drove the market in 2021, and experts believe that investor sentiment is once again favoring a potential triple-digit price surge for bitcoin in the coming months.
While this may seem like a long shot to many, the recent supply-demand imbalance in favor of bulls, combined with the growing interest of Wall Street in spot bitcoin exchange-traded funds, has resulted in a significant price rally for the cryptocurrency. As of writing, bitcoin is trading near $67,000, representing a 59.7% year-to-date gain, with the CoinDesk 20 Index reporting a broader market gain of 45%.
Further validating this renewed interest in the market is the record open interest in bitcoin options on Deribit, which has surpassed its previous peak of $14.36 billion in October 2021 and currently stands at a staggering $20.4 billion. This growth is also reflected in the options market for ether (ETH), which has reached an all-time high of $11.66 billion in open interest.
Interestingly, the increased activity in cheap, deep out-of-the-money (OTM) calls on Deribit is being seen as a move reminiscent of purchasing lottery tickets by some experts. While the potential for a massive profit may seem tempting, it is essential to note that the loss is limited to the premium paid for the option.
The Surge in $200,000 Strike Bitcoin Call Activity Suggests a Revival in Investor Enthusiasm
A new analysis conducted by Deribit unveils a resurgence of interest in bitcoin options, specifically in the $200,000 strike bitcoin call. This particular option has garnered considerable attention as it currently holds a notional open interest of over $20 million, which is almost three times the going market rate for bitcoin.
According to experts, this spike in options activity is reminiscent of the animal spirits that drove the market in 2021 and signals that investors are once again betting on a potential triple-digit price surge for bitcoin in the coming months.
While some may view this as a far-fetched possibility, there are several factors that support the idea of a bullish market for bitcoin. The current supply-demand imbalance, which heavily favors bulls, has been compounded by the growing interest of Wall Street in spot bitcoin exchange-traded funds, resulting in a significant price rally for the cryptocurrency. As of writing, bitcoin is trading near $67,000, representing a 59.7% year-to-date gain, with the CoinDesk 20 Index reporting a broader market gain of 45%.
Further validating the renewed interest in the market is the record open interest in bitcoin options on Deribit, which has surpassed its previous peak of $14.36 billion in October 2021, reaching a staggering $20.4 billion. A similar trend can be seen in the options market for ether (ETH), which has hit an all-time high of $11.66 billion in open interest.
The current trend in the options market is characterized by the rising popularity of cheap deep out-of-the-money (OTM) calls on Deribit. Some experts liken this to purchasing lottery tickets, where the potential for a substantial profit is high, but the loss is limited to the premium paid for the option.
