Bitcoin and XRP Traders Split on Volatility Bets
Big traders are placing opposite bets on Bitcoin and XRP right now, and the contrast tells you something about where institutional money
Quick overview
- Big traders are making contrasting bets on Bitcoin and XRP, indicating differing institutional sentiments about market direction.
- Bitcoin options traders are heavily investing in volatility plays, with over 20% of trades betting on significant price swings without a directional bias.
- In contrast, XRP traders are shorting a massive strangle, betting that volatility is overstated and prices will remain within a specific range.
- The divergence in trading strategies reflects the larger market dynamics, with Bitcoin options showing over $44 billion in open interest compared to XRP's $67.6 million.
Big traders are placing opposite bets on Bitcoin and XRP right now, and the contrast tells you something about where institutional money thinks these markets are headed.
Bitcoin options traders have been loading up on volatility plays. Recent data from Deribit shows strangles hit nearly 17% of block trades over the past week, with straddles adding another 5%. That’s more than 20% of total flows betting on big price swings without picking a direction. Deribit’s CEO Luuk Strijers called that figure unusually high, saying it points to traders who expect major moves but have no clue which way.
How it works: With a strangle, you’re grabbing out-of-the-money calls and puts at different strikes. Cheaper upfront, profitable if price rockets either direction. A straddle does the same thing but at the same strike price—costs more, but pays faster when volatility hits. Both lose money if nothing happens and the market just sits there.
XRP traders? They’re doing the exact opposite. Someone just shorted a massive strangle on Wednesday with 40,000 contracts each on $2.20 calls and $2.60 puts expiring November 21. That’s 80,000 XRP worth of bets that volatility is overblown and the price stays between those two numbers.
Lin Chen from Deribit’s Asia team explained the thinking. XRP’s implied volatility has spiked past 80% because everyone’s nervous about macro stuff—potential government shutdowns, rate cut speculation, general uncertainty. This trader thinks all that fear is already baked into prices. They’re collecting premium by betting XRP just bounces around in a range.
It’s a ballsy move. Shorting strangles can blow up spectacularly if volatility actually does surge. You’re on the hook for unlimited losses if price breaks hard past your strikes. Most retail traders shouldn’t touch this kind of trade unless they’ve got serious risk controls in place.
The divergence makes sense when you look at market size. Bitcoin options on Deribit represent over $44 billion in open interest (the most liquid hedging tool crypto has). Ethereum sits at $9 billion and leans toward put diagonal spreads, which profit from time decay while staying somewhat exposed to volatility. XRP options? Just $67.6 million in open interest. These block trades don’t happen often, but when one shows up, it moves the needle.
Why all the volatility bets on Bitcoin? Not exactly a mystery. Prices are choppy, regulatory signals keep changing, and macro conditions feel unstable. Traders with serious capital don’t want to pick tops or bottoms right now. They’d rather bet that something significant happens soon, collect the payoff when it does, and let someone else worry about calling the direction.
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