Ether Traders Bet Big on 140% Price Surge by Year-End

Crypto traders are placing significant bets on ether, with a recent rally driving substantial interest in the cryptocurrency. Last week, block traders, which typically include institutions and large players, executed bull call spreads on ether. These traders purchased $3,500 call options while simultaneously shorting an equal number of calls at the $6,000 strike, both set to expire on Dec. 26.

This strategy was executed via the over-the-counter platform Paradigm and was later listed on a crypto exchange. Traders executed 30,000 contracts of the $3,500/$6,000 call spreads across 10 separate trades, with an initial cost of just over $7 million. The strategy is designed to yield the highest profit if ether rises to or beyond $6,000 by Dec. 26. On these platforms, one options contract represents one ETH.

The large volume of the $3,500/$6,000 call spreads indicates a strong expectation of a bullish move to $6,000 by the end of the year. As of the latest data, ether was trading at around $2,510. If ETH stays below $3,600, the strategy will expire worthless, limiting the loss to the initial cost of $7 million. Another downside of this strategy is that traders stand to lose out on potential upside above $6,000 due to the short position at that strike level.

Ether's price has risen over 80% to $2,500 since early April, when the broader market panic saw ETH hit a low of around $1,390 on several exchanges. Analysts, such as Magadini, continue to see upside potential in ether, particularly as risk assets continue to rally. Magadini noted that there is a good argument for ETH "catching-up" as spot ETFs with staking rewards could be a catalyst for institutional participation and sentiment turns around.