Massive bitcoin call spreads target $72,000 by month end, right when the Fed meets
SummaryTraders have bought $2.5 billion in notional bitcoin call spreads on Deribit, targeting $72,000 by July 31.The timing aligns with the Feds July 29 interest rate decision, with markets currently favoring a hold. Bitcoin traders are betting billions that the cryptocurrencys spot price will climb to $72,000 by the months end, a timeline that lines up with the July Federal Reserve meeting. They have done so this week with the help of Deribit-listed bitcoin call options, or derivative contracts that pay off when BTCs spot price surges beyond specific price levels by a certain date. According to Deribit, a total of 20,000 contracts of the $70,000 call expiring July 31 were purchased alongside a sale of 20,000 contracts of the $72,000 call of the same expiry. That amounts to $2.5 billion in notional value, the dollar value of 40,000 contracts, each representing 1 bitcoin. This is known as a bull call spread, a strategy initiated when expecting a moderate rise in the price of the underlying asset. Think of it as buying a ticket that pays out if bitcoin rises to $70,000, while selling away the gains above $72,000 to lower the cost of that ticket. The trade-off: a lower entry cost and lower maximum