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Bitcoin Price $47K Floor: Whale Makes $20M Options Play

Last Updated February 21, 2024 8:53 AM
Teuta Franjkovic
Last Updated February 21, 2024 8:53 AM
By Teuta Franjkovic
Verified by Peter Henn

Key Takeaways

  • Whale bets $20M on Bitcoin price falling below $47k by March end.
  • Trader uses put options to profit if Bitcoin dips below $50k or $43k.
  • Limited downside with capped gains if Bitcoin crashes further.

A hefty options play could see a trader make more than $20 million if Bitcoin falls to $47,000 by the end of March.

Trader Places Large Bitcoin Options Bet for Short-Term Decline

On Tuesday, a trader made a significant Bitcoin (BTC) options transaction , designed to capitalize on an anticipated near-term price drop. Therefore, Bitcoin has now established a baseline at $47,000. The deal involved the purchase of 100 lots of put options for a March 29 expiry. It was made on crypto block trading platform Greeks.Live , with strike prices set at $50,000 and $43,000.

To help finance this, the trader sold 200 lots of put options with the same expiry at a strike price of $47,000. Put options grant the holder the right, but not the obligation, to sell bitcoin at a specific price on or before a certain date. As a result, it is fair to assume the buyer had a bearish outlook.

Trader Executes $20 Million ‘Butterfly’ Bet on BTC with $47K Target

A substantial transaction , known as a block trade, was executed off the public market for over $20 million, according to Greeks.Live. These are typically associated with institutional investors, due to their large size and execution outside of standard market venues.

The deal will maximize profits if Bitcoin’s price hits $47,000 by the expiry date.  This means there is an expectation for a price dip in the coming weeks, but not below the $47,000 mark.

The trade structure aims for a peak profit at a specific mid-range price with limited losses at either extreme. The chart resembles the shape of a butterfly, earning it the moniker “butterfly bet.”

BTC butterfly
Credit: Greeks.Live

‘Whales’ Target Bitcoin Drop with Strategic Bets for March 29

The payoff projection  for a notable Bitcoin bet highlights maximum gains  if Bitcoin reaches $47,000. On this occasion, the trade will break even at $44,201 and $49,770. It seems it is going this way since, at the time of writing (February 21 2024), the price hovered at around $52,000,

According to Adam, an analyst at Greeks.Live, prominent investors are increasingly placing short positions, anticipating a modest decline in bitcoin’s value before March 29.

He said:

“Recent block trades have been concentrated in two directions – short price or long volatility. Term selection has mostly been concentrated before BTC halving. Looking at the characteristics of the trades, it is likely that traders are holding spot and purchasing hedging positions.”

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