Deribit’s emergent XRP options market is witnessing a notable uptick in activity, particularly centered around the $1.10 call option. This contract, signaling a bet on the cryptocurrency’s price doubling by month’s end, has garnered substantial interest.

As of now, the $1.10 call option, expiring on August 28, boasts an open interest of 4,347,000 contracts, valued at approximately $2.44 million. This volume marks a significant milestone for an options market just five months into operation, according to Amberdata. Notably, open interest has surged by 838,000 contracts within this brief period.

Griffin Ardern, head of options trading and research at crypto financial platform BloFin, suggests that the spike in $1.10 call activity reflects a predominantly bullish sentiment. He elaborated:

Analyzing the gamma distribution, it appears we’re looking at a net long position set to mature on August 30. Should XRP breach the resistance level of $0.75 observed over the past fortnight, the price is poised to surpass $1.10.

Ardern further speculates that the potential approval of an XRP ETF in the U.S. could be a significant driver behind the bullish momentum:

“Institutions might soon apply for an XRP ETF, which could catalyze a sharp price increase,” he added.

XRP experienced a dramatic 30% surge to 62 cents last month, though it has since retraced to slightly above 57 cents, according to CoinDesk. The call option grants its holder the right, but not the obligation, to acquire XRP at a specified price before or on the expiration date. A call option buyer anticipates a price rise, betting that the asset will appreciate beyond the strike price. Gamma measures the sensitivity of an option’s delta to fluctuations in the underlying asset’s price.

Read more: Ripple Ventures into Stablecoin Testing on Ethereum and XRP Ledger

CoinDesk has sought additional insights from Deribit for further clarification.

On August 7, U.S. District Court Judge Analisa Torres rendered a decision in the Securities and Exchange Commission’s (SEC) case against Ripple Labs, a lawsuit initiated in 2020 regarding unregistered XRP sales. The court imposed a $125 million penalty for institutional XRP sales and issued an injunction against further violations, but dismissed the SEC’s request for a $2 billion fine. Ripple deemed this ruling a victory, kindling speculation about a potential XRP ETF launch in the U.S. The approval of Bitcoin and Ether ETFs earlier this year has paved the way for substantial mainstream investments.

Nevertheless, Martin Cheung, an options trader at Pulsar Trading Capital, remains cautious about XRP reaching $1.10 by August 28:

“XRP has already experienced significant gains this year. Many are anticipating that future ETF approvals will include XRP and SOL. However, with the deadline so imminent, a potential XRP ETF announcement might boost prices by 20%, but $1.10 seems ambitious,” Cheung noted.