The 1 million contract block option transaction on Ripple (XRP) has raised expectations that the price will exceed 4 dollars by the end of the year.
While the crypto market has been calm this week, a record-sized transaction in XRP options has drawn attention. According to Amberdata, on Monday, a XRP call option with a strike price of 4 dollars and an expiration date of December 26 changed hands through a block transaction of exactly 1 million contracts on the Deribit exchange. Since each contract on Deribit is sized at 1,000 XRP, this transaction indicates a value in the billions of dollars.
At first glance, this move can be seen as a strong expectation that the XRP price will rise above 4 dollars by the end of the year. However, experts emphasize that there may be a different strategy behind the transaction rather than a direct bullish forecast. Deribit’s Head of Asia Business Development, Lin Chen, noted that this large transaction is most likely part of a covered call strategy.
Covered call is based on allowing investors to earn premium income by writing options at a certain price without selling the assets they hold. While this method provides additional income, it limits potential returns above the price target. This strategy, which is frequently used by Bitcoin (BTC) investors in the crypto market, has recently played a role in the decline of implied volatility.
This transaction of 1 million in XRP reflects the aim of large investors to hedge against risks and generate additional income rather than solely signaling a bullish trend in the market. Nevertheless, the fact that such large contracts lock the price expectation at the 4 dollar level has shifted market attention towards the end of the year.
