Ethereum Traders Bet Big on $6,000 Ether by Year-End
Crypto traders are betting heavily on Ethereum’s ether, expecting it to reach $6,000 by December 26 through bullish strategies.
Key Highlights
- Traders have executed over 30,000 options contracts, costing around $7 million.
- Ether’s price has risen by more than 80% since April, with analysts predicting further increases.
In the latest market movements, large traders known as block traders employed a strategy called bull call spreads on ethers, buying $3,500 call options while simultaneously shorting equivalent call options at the $6,000 strike. All options are set to expire on December 26.
By using the over-the-counter platform Paradigm, trades were later available on the Deribit crypto exchange. During the execution, they completed 30,000 contracts of the $3,500/$6,000 strategy across ten trades, incurring costs of over $7 million.
The most profit from this strategy will derive if ether climbs to or surpasses $6,000 by the end of the year. One options contract on Paradigm and Deribit corresponds to one ETH.
Such a significant amount of $3,500/$6,000 call spreads suggests a strong bullish sentiment towards ether reaching $6,000 before the year concludes. As per current CoinDesk data, ether is priced at approximately $2,510.
However, if ETH remains beneath $3,600, the traded strategy may expire worthless, limiting the loss to the initial $7 million. Additionally, any price surge beyond $6,000 could lead to missed chances for profit due to the short position at that strike level.
Ether’s recent escalation has seen it trade above $2,500, recovering from lows around $1,390 earlier this year during a market panic.
Market expert Magadini states, “There’s reason not to call tops in ETH right now.” He expresses confidence in favorable trades, especially for Ethereum, noting the potential for institutional participation to boost sentiment as risk assets rally.
Magadini remarked, “I continue to like these upside trades… There’s a good argument for ETH ‘catching-up’ due to the potential for spot ETFs with staking rewards.”
