Some of the largest traders in the bitcoin options market are betting on a price surge to $72,000 by the end of July. This move coincides with the Federal Reserve’s interest rate announcement scheduled for July 29.
Over the past week, these traders have created massive call spreads on Deribit, one of the main crypto derivatives exchanges. Essentially, they bought 20,000 contracts for a $70,000 call option and sold 20,000 contracts for a $72,000 call option, both expiring on July 31. Each contract represents 1 bitcoin, and the total notional value of these trades reaches $2.5 billion.
This strategy is called a bull call spread. It works like buying a ticket that pays off if bitcoin’s price climbs above $70,000, but with the trade-off that gains beyond $72,000 are capped because of the sold calls. The benefit is a lower upfront cost and limited losses if bitcoin doesn’t rise as expected.
Jean-David Péquignot, Deribit's chief commercial officer, noted that the sheer size and repetition of these call spreads suggest that institutional investors, not retail traders, are behind the moves. Such big bets require significant capital and precise market timing.
The timing here is key. Bitcoin recently rebounded to around $64,000 from below $58,000 earlier this month, signaling renewed confidence. But the expiration date two days after the Fed’s rate decision implies that some traders expect this event to trigger a strong price move.
Market expectations currently lean toward the Fed holding interest rates steady around 3.5% to 3.75%, with roughly a 75-80% chance according to fed funds futures. Inflation data from June, showing a slowdown, has eased fears of further hikes, but some uncertainty remains.
This call spread trade can be seen as a hedge or a speculative play on how the Fed’s decision might impact bitcoin prices. The fact that so much money is committed to this specific strike and expiry highlights the growing sophistication of bitcoin derivatives trading.
