$2.5B options bet targets $72,000 Bitcoin after Fed
Large traders have positioned $2.5 billion in call spreads expiring in late July, signaling confidence that the Federal Reserve's upcoming rate decision will catalyze a further Bitcoin rally despite brewing geopolitical tensions.
Institutional traders have executed a $2.5 billion options strategy on Deribit that pays out if Bitcoin reaches $70,000 by the end of July, while capping maximum gains at $72,000. The block trade involved the purchase of 20,000 $70,000 calls offset by the sale of 20,000 $72,000 calls, both expiring on July 31. By selling the higher strike, the traders reduced their upfront capital requirements and limited downside risk if the market stagnates.
The sheer size and precise strike selection of the position point to institutional backing rather than retail speculation. "This week we have seen some large blocks in BTC topside call spreads," said Jean-David Péquignot, chief commercial officer at Deribit. The structural bet reflects growing confidence in Bitcoin's recent price recovery from below $58,000 to approximately $64,000.
The July 31 expiry is strategically aligned with the macroeconomic calendar, landing exactly two days after the Federal Reserve concludes its July 29 interest rate decision. Traders positioning for this specific window are effectively betting the central bank's announcement will act as a catalyst to push Bitcoin higher.
Fed funds futures currently indicate a high probability that policymakers will hold the benchmark rate unchanged in the 3.5% to 3.75% range, with odds pegged between 75% and 80%. The remaining probability is divided between a rate hike and a more unlikely cut.
The heavy bullish positioning follows a sharp deceleration in June consumer and producer inflation figures. That data was heavily influenced by a drop in oil prices following a U.S.-Iran ceasefire, which left core inflation flat.
Despite this week's sharp escalation in U.S.-Iran tensions and subsequent disruptions to oil flows through the Strait of Hormuz, the options flow suggests large traders are looking past the geopolitical noise. WTI and Brent crude posted their largest surges since March, prompting some analysts to warn that the June inflation data is already backward-looking.
The options activity parallels a broader recovery in digital asset liquidity. Centralized exchange volumes increased in June for the first time in five months. Spot trading climbed 15.3% to $1.11 trillion, while perpetual volumes for real-world assets surged to a record $311 billion.
