Are Bitcoin Traders Reviving Animal Spirits with $20M Locked in $200K Call Option?

Deribit data indicates a surge in activity for the $200,000 strike bitcoin call option, which is significantly higher than the current market rate of the cryptocurrency.

Open interest in options has reached all-time highs alongside the impressive rally in bitcoin’s price.

Investor optimism, reminiscent of the bullish sentiment in 2021, is driving increased interest in bitcoin options that would pay off if the cryptocurrency triples in value in the near future.

The $200,000 strike call option on Deribit has attracted over $20 million in notional open interest, with a majority locked in the December 27 expiry. This strike price is nearly three times higher than bitcoin’s current market price.

The recent surge in demand for deep out-of-the-money call options reflects the belief that bitcoin’s forthcoming halving-induced supply reduction will favorably impact its price trajectory.

Overall market interest in bitcoin options has reached a record $20.4 billion on Deribit, signaling growing enthusiasm in the options market amid the ongoing price rally.

Investing in deep out-of-the-money call options is akin to purchasing lottery tickets, offering the potential for substantial profits if the market exceeds the strike price before expiration.