Whale placed $5 million on the dip of Bitcoin below $110,000

A crypto investor has made a large bet on the price of the first cryptocurrency dropping below $110,000 by the beginning of August – a dip of at least 8% is anticipated. This is reported by Bloomberg.

On July 23, a trader purchased put options with a strike price of $110,000 on Deribit, expiring on August 8. According to prime broker FalconX, he paid around $5 million in premium for the contract. The transaction took place in two stages — for 3000 and 2000 BTC. The total nominal value of the option exceeded $550 million.

"This is likely the largest unilateral block trade by nominal dollar value in the history of Deribit," said Griffin Sears, head of derivatives at FalconX's New York division.

He noted that the size, structure, and short-term nature of the deal indicate a "high level of institutional confidence." According to him, it is telling that such a volume of risk was executed through a single position rather than a complex combination, which points to a "clearly defined strategy."

"Traders could also use similar structured bets to hedge against short-term fluctuations or play on volatility," the agency writes.

Open interest at various strike prices of options. Source: Deribit, Bloomberg The cryptocurrency derivatives market is still in its early stages of development compared to the traditional options segment. However, the size and structure of the deal indicate a growing risk appetite from institutional investors, analysts noted.

"This deal is important not only for its volume […]. It demonstrates how far the crypto options market has advanced in terms of depth and its ability to handle institutional-scale flows," noted Paradigm's head for the EMEA region, Nicolas Cuatravo.

The lion's share of trading volume in the current market phase comes from derivatives: futures, options, and perpetual swaps. Open interest on Deribit exceeded $40 billion.

As of the time of writing, the first cryptocurrency is trading around $115,740. Over the past 24 hours, the asset has decreased in value by 2.5%, according to CoinGecko.

Let us remind you that in June, there was a desire among investors in the options market to hedge against the risks of a Bitcoin dip to the $100,000 mark.