Major Crypto Investor Places $150 Million Bet on Ether, According to Trading Data
In the last 24 hours, a substantial player, known as a whale, has made a significant move in the ether (ETH) market. This investor, wielding considerable capital, has engaged in substantial trading activity involving call options.
According to data from Greeks.Live, the whale has acquired nearly 92,600 ETH call option contracts on the Deribit exchange, with a total value of $150 million. It's important to note that on Deribit, each options contract represents 1 ETH.
The purchase of these call options is a clear signal of bullish sentiment toward the second-largest cryptocurrency by market volume. Notably, all of these options were bought without any protective cover, indicating a strong long-term bullish outlook.
A call option grants the buyer the right, but not the obligation, to buy the underlying asset at a predetermined price in the future. By engaging in such a transaction, the call buyer essentially expresses optimism about the market. When a position is taken "naked," it means the trade is speculative and lacks protection against potential adverse movements in the asset's price.
The significant volume was primarily concentrated in out-of-the-money (OTM) calls, with strike prices well above the current market value of ether, which stands at $1,633. The whale was involved in sizable transactions, blocking over 40,000 contracts of ETH December expiry calls at $2,200, along with nearly 50,000 contracts of October expiry calls at $2,000. Block trades, like these, are substantial transactions negotiated outside of the exchange's order book to minimize their impact on the asset's market price. They often serve as a proxy for institutional activity.
Recently, Ether experienced a low point of $1,532, marking a six-month low. This dip was influenced by considerations surrounding the potential sale of assets from the multi-billion-dollar cryptocurrency holdings of the distressed digital assets exchange, FTX.
Since then, the price of Ether has rebounded to $1,634, showcasing a 36% increase in value over the course of this year. According to research firm RxR, the cryptocurrency is presently trading at a 27% discount to its estimated fair value, as determined by a Metcalf law model. This model takes into account the active adoption of users on both the mainnet and the layer 2 scaling solution.