Major Traders Bet Over $7 Million on Ethereum Reaching $6000

Institutional and other major players have wagered on a significant rise in the second-largest cryptocurrency by market capitalization, according to observations shared by CoinDesk analyst Omkar Godbole.

According to his information, last week block traders initiated bull call spreads on Ethereum — purchasing call options with a strike price of $3500 while simultaneously selling an equal number of calls at the $6000 level. Both positions expire on December 26.

Market participants executed the strategy via the over-the-counter platform Paradigm, subsequently formalizing the trades on the Deribit crypto exchange. They concluded 30,000 contracts with a $3500/$6000 call spread across ten separate transactions, spending just over $7 million on initial costs and margin requirements.

The strategy will yield the greatest profit if Ethereum’s price rises to $6000 or higher by December 26. On the Paradigm and Deribit platforms, one option contract corresponds to 1 ETH.

The large volume of $3500/$6000 call spreads indicates confident expectations of Ethereum reaching $6000 by the year’s end.

If the ETH price remains below $3500 at expiration, the potential loss is limited to the initial costs of $7 million. Conversely, if the asset’s price rises above $6000, traders miss out on potential profits due to the short position at this strike level.

At the time of writing, the crypto asset is trading around $2470, according to CoinGecko.

Earlier, analysts at Bernstein identified three main factors driving Ethereum’s growth.