Whale Bets $5 Million on Bitcoin Plummeting Below $110,000

A crypto investor has made a significant wager that the price of Bitcoin will drop below $110,000 by early August, anticipating a decline of at least 8%. This information was reported by Bloomberg.

On July 23, the trader purchased put options with a strike price of $110,000 on Deribit, set to expire on August 8. According to prime broker FalconX, the premium for this contract was approximately $5 million. The transaction was executed in two parts, involving 3,000 and 2,000 BTC, with a total nominal value exceeding $550 million.

«This is likely the largest single-block trade in dollar terms in Deribit’s history,» said Griffin Sears, head of the derivatives division at FalconX’s New York office.

He emphasized that the size, structure, and short-term nature of this deal reflect a «high level of institutional confidence.» Importantly, the fact that such a substantial amount of risk was taken on through a single position, rather than through a complex arrangement, points to a «clearly defined strategy.»

«The traders may have also employed similar structured bets to hedge against short-term fluctuations or to capitalize on volatility,» the agency noted.

The crypto derivatives market is still in its early stages compared to traditional options trading. However, the scale and structure of this deal indicate a growing risk appetite among institutional investors, analysts observed.

«This transaction is significant not just for its size […]. It demonstrates how far the crypto options market has advanced in terms of depth and ability to handle large institutional flows,» noted Nicolas Quatravo, head of Paradigm for the EMEA region.

Currently, a substantial share of the trading volume in the market phase involved derivatives such as futures, options, and perpetual swaps. Open interest on Deribit has surpassed $40 billion.

At the time of writing, Bitcoin is trading around $115,740, showing a 2.5% decrease over the last 24 hours, according to CoinGecko.

It’s worth recalling that in June, the options market indicated that investors were looking to hedge against a decline of Bitcoin to the $100,000 mark.