Bitcoin traders are betting billions of dollars that the cryptocurrency’s spot price will rise to $72,000 by the end of the month, which coincides with the Federal Reserve’s July meeting, according to coindesk.com.
They did so this week using Bitcoin call options listed on Deribit—derivative contracts that pay out when the spot price of BTC exceeds certain levels by a set date.
According to Deribit data, a total of 20,000 call option contracts with a strike price of $70,000 were purchased, expiring on July 31, while simultaneously selling 20,000 call option contracts with a strike price of $72,000 and the same expiration date. This represents a notional value of $2.5 billion, the dollar value of 40,000 contracts, each of which represents 1 bitcoin.
This is known as a bull call spread, a strategy initiated when a moderate increase in the price of the underlying asset is expected.
Think of it as buying a ticket that pays out if Bitcoin rises to $70,000, while selling profits above $72,000 helps reduce the cost of that ticket. The trade-off: a lower entry cost and a smaller maximum loss if the market stays flat or falls, but in exchange, you forgo any profit above $72,000.
“This week, we’ve seen large blocks of BTC bullish call spreads,” Jean-David Péqueno, chief commercial officer at Deribit, told CoinDesk.
Option flow of this size and frequency often reflects institutional positioning rather than retail activity, given the capital required and the precision needed in strike price selection.
It’s All About the Key Price
The timing of the trade is notable for two reasons. First, it signals confidence in Bitcoin’s recent rise to $64,000 from below $58,000 earlier this month. More importantly, the trade is set for settlement on July 31, two days after the Federal Reserve’s interest rate decision scheduled for July 29. The flow of call spreads suggests that at least some large traders expect the meeting to act as a catalyst for a price move toward $72,000.
Federal funds futures currently suggest the rate will remain unchanged at the July meeting, with most analysts estimating the probability that the central bank will keep the benchmark rate at 3.5%–3.75% at 75%–80%. The remaining probability is split between a rate hike and, to a lesser extent, a rate cut.
Fears of a rate hike have eased following June’s inflation data, which showed a sharp slowdown in price pressures at both the consumer and producer levels. Much of the relief stems from a sharp drop in oil prices over the course of the month, driven by a truce between the U.S. and Iran; core inflation, excluding food and energy, remained unchanged.
However, tensions between the U.S. and Iran escalated sharply this week, with new attacks disrupting oil shipments through the Strait of Hormuz. WTI and Brent prices rose at their fastest pace since March. This has led some analysts to view the June decline in inflation as outdated and to urge caution, as the data was collected before this escalation.
But for now, at least some major traders are ignoring the geopolitical noise and betting on further growth in the price of Bitcoin.
