Hedge Funds Admit ‘Smart Money’ Is Bullish On Ether

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Last Updated on 16 September 2022 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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The so-called Wall Street cheat sheet is a well known image shat shows the psychology of a market cycle from optimism over belief, thrill and euphoria all the way back down to anxiety, denial, panic and anger.

The traders who tend to get in at the beginning of this trade and exit before the top, are known as the ‘smart money’. It was originally used by gamblers on horse racing tracks to point out who was the luckiest among them.

After the stock market rises of the 1950s to the 1980s, it switched to Wall Street. By now, smart money is the capital that is being controlled by institutional investors, market mavens, central banks, funds, and other financial professionals.

They are the people ‘in the know’ who have the patience to wait for their investment to pay off. By 2022, most of that ‘smart money’ is in the hands of VCs (venture capitalists) and hedge funds.

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Betting on Ether

Speaking to the Financial Times in one of their long-spun pieces on the upcoming Merge, major hedge funds admitted that currently the ‘smart money’ is betting big on Ether. The crypto coin of the Ethereum blockchain is about to switch from proof of work to proof of stake, a process known as ‘the Merge’.

Smart Money is betting on Ether using Call Options, futures contracts which pay out if the price of Ether rises.

James West, CEO of Globe Exchange, a crypto derivatives exchange admitted that:

This is one of the busiest trades in crypto history. Many of the trades were placed in the options market, where lots of smart money is buying, with many expecting a successful move to push up ether prices.

However, in order to take out the volatility for which the crypto market has become known, hedge funds are now protecting their investments from a possible sell-off should the Merge not go ahead as planned by using Put Options, futures contracts which pay out as the price of Ether drops.

According to estimates by Deribit, which oversees most of the Ether options on exchanges, 80% of all futures contracts on Ether are currently bullish, and 20% are bearish.

Violka08 / Depositphotos.com