Trader Bets $1 Million that Bitcoin Price Will Reach $50,000 in 2018

Trader Bets $1 Million that Bitcoin Price Will Reach $50,000 in 2018

An unknown trader or group of traders has placed a million-dollar bet that the bitcoin price will reach $50,000 by the end of 2018.
As first reported by  The Wall Street Journal, trading data from LedgerX – the first U.S. exchange to list bitcoin derivatives – shows that an unidentified trader or group of traders paid $990,000 for the right to purchase up to 275 bitcoins in 2018 – at a price of $50,000 each

The bet was made using a call option, a contract that allows the buyer to purchase an asset at a particular price on or before a specific date, no matter what the current market price is. In this case, the buyer or buyers paid an average of $3,600 per bitcoin – a fee roughly equivalent to one-fifth of a bitcoin at today’s exchange rate – to lock in a price of $50,000 until Dec. 28, 2018. If the trader exercises the full value of that option, they will have to pay $13,750,000, bringing the full value of their investment to nearly $15 million.

Although the trader remains unidentified, LedgerX CEO Paul Chou hinted that the bet was indicative of rising interest from institutional investors, many of whom remained on the sidelines due to the lack of robust bitcoin derivatives markets on regulated exchanges.

“Without a doubt, there are institutions out there that are looking at these types of trades or have done these types of trades,” Mr. Chou told the Journal. “It’s not an individual, let’s put it that way.”

Read More…

No Comments

Sorry, the comment form is closed at this time.