Bitcoin News Today: Bitcoin Traders Bet on $200K But Implied Odds Suggest Caution

Bitcoin traders have positioned over $8.8 billion in options set to expire on December 26, with nearly $1 billion in open interest dependent on the price surpassing $200,000. Despite the headline-grabbing nature of these high-strike calls, the implied probabilities suggest traders are not outright betting on a 72% year-end rally. Instead, many are using structured options strategies to hedge or leverage limited price movements without expecting BTC to reach the $200,000 level.

Call options currently dominate the market, with total open interest at $6.45 billion compared to $2.36 billion in puts. This skew reflects a general bias toward bullish positioning, but bearish traders remain comfortable with Bitcoin below $120,000. For example, call options with strike prices of $170,000 or higher would expire worthless unless BTC gains 46% from its current price. If the price closes near $116,500 on expiry, only $878 million of open interest would retain value.

Professional traders are using advanced strategies such as the Call Diagonal Spread, which involves buying a long-dated $200,000 December call while selling a shorter-dated $200,000 call, often expiring in October. This structure benefits if BTC reaches $146,000 by October 31, allowing the long call to appreciate while the short one expires worthless. However, prices above $200,000 could hurt the position due to capped gains and limited downside.

Another structured strategy, the Inverse Call Butterfly, combines buying a $140,000 call, selling two $160,000 calls, and buying a $200,000 call—all with December expiries. The position profits if BTC lands near $160,000, netting around $13,050 in BTC value. However, losses begin to accumulate if BTC climbs past $178,500. The $200,000 call in this setup helps cap potential losses, with a maximum loss of approximately $12,700.

The $200,000 call is currently priced at BTC 0.007 (about $814), implying a probability of BTC reaching that level below 3% using the Black-Scholes model. In contrast, the $140,000 call is priced around BTC 0.051 ($5,940), suggesting a 21% probability. These figures highlight the cautious nature of the market, as traders are not outright betting on a massive price surge.

Further analysis shows that nearly $900 million in put options are targeted at $50,000 to $80,000 for December expiry, indicating that bearish bets are still in play, albeit with lower probabilities. While the aggressive call options may attract media attention, the actual positioning reflects a more nuanced and risk-aware approach.

Interestingly, Polymarket gives Bitcoin a 13% chance of reaching $200,000 by year-end, a figure higher than the implied probability derived from options pricing. This discrepancy could reflect different market assumptions or a broader range of factors influencing sentiment in prediction markets.

Traders are clearly not all-in on a 72% rally but are instead employing structured options to manage risk and capture leverage where possible. The real story lies in the balance between headline figures and the underlying probabilities, revealing a market that is both bullish and cautious in its positioning.

[1] Source: [1] title: Traders bet on $200K year-end Bitcoin, but real odds tell a different story (url: https://cointelegraph.com/news/traders-bet-on-200k-year-end-bitcoin-but-real-odds-tell-different-story)