Topic: [2017-12-21] Mystery Investor Bets $1 Million on Bitcoin Hitting $50,000 (Read 173 times)
December 24, 2017, 07:31:36 AM
For us 1 million is a whole lot of money (and it is) but for these guys it really isn't. I'm guessing odds are that the person(s) who made this bet atleast have a (combined) net worth of 200+ million dollars. So in that case 1 million dollars is only 0.5% of their entire capital so in that sense it's quite affordable for them to make such a hefty bet. And bitcoin hitting 50k by December 28th 2018 isn't that unlikely either.
December 24, 2017, 06:59:47 AM
It's nothing to a large holder having fun with his profits. If that entity or entities were really confident in the market to reach such levels, they would go absolutely nuts on these contracts instead of just a "$1 million" bet.
It's basically like Roger Ver having challenged people to bet a few million where he predicted that S2X coin would surpass Core's value after splitting. If he was really that confident, he would have gone all out.
I see it more as some sort of a publicity stunt than something done to actually see Bitcoin reach that value. It's probably to add an extra dimension to the already booming current bullish sentiment.
It's basically like Roger Ver having challenged people to bet a few million where he predicted that S2X coin would surpass Core's value after splitting. If he was really that confident, he would have gone all out.
I see it more as some sort of a publicity stunt than something done to actually see Bitcoin reach that value. It's probably to add an extra dimension to the already booming current bullish sentiment.
December 24, 2017, 05:27:33 AM
I don't see anything surprising in such rates. We see a significant drop in the price of bitcoin now. Speculators are trying to trigger panic and buy large amounts of coins. Perhaps they know the future growth of demand for this currency. I am sure that very soon there will be a significant price increase. Now to buy bitcoins.
December 24, 2017, 02:09:10 AM
That is a very big bet to make. I have never understood the derivatives market, but these kind of premiums seem crazy to me. The price may very well cross $50,000 and these option buyers could look very intelligent, but the risk of losing a million dollars if the price is below $50,000 scares me. This seems to be gambling in its purest form.
If this investor (or investors) have a few hundred million dollars a 1 million dollar bet isn`t that much.
He or they just put some money that they could afford to lose.50000 USD is pretty optimistic,but it`s a doable goal,if we compare it with the 2017 bitcoin price growth.
If the options are "in the money" ,he will make huge profits,maybe ten times more than his investment.
December 23, 2017, 02:56:40 AM
That is a very big bet to make. I have never understood the derivatives market, but these kind of premiums seem crazy to me. The price may very well cross $50,000 and these option buyers could look very intelligent, but the risk of losing a million dollars if the price is below $50,000 scares me. This seems to be gambling in its purest form.
December 22, 2017, 08:25:55 AM
How high can Bitcoin go? Someone thinks its remarkable bull market will continue right up to $50,000—and they’re putting their money where their mouth is.
As the Wall Street Journal reports, an unnamed investor or investors have purchased a series of options contracts worth nearly $1 million. The contracts, sold on the LedgerX derivatives exchange, are “calls” that give the owner the right to pay $50,000 by late next year to purchase units of the popular digital currency:
The trade wagering on a move to $50,000 was the first of its kind on LedgerX. … Just under $1 million was paid for the options in one or more trades that took place during the 24-hour period ending at 4 p.m. Eastern Time on Wednesday, the records show. It is unclear from LedgerX’s data who the buyer or buyers were or whether the purchasing was done in multiple transactions or just one.
If bitcoin is below $50,000 on Dec. 28, 2018, the options will expire worthless, and the $1 million will be lost. If bitcoin rises above that level, the options will give their owners the right to buy 275 bitcoins for $50,000 apiece—a transaction that would cost about $13.8 million.
The call options represent an extremely bullish position even for Bitcoin since, as the Journal notes, they will be worthless if bitcoin doesn’t break the $50,000 mark by the end of next year.
Such an increase would represent an approximately 150% percent increase on bitcoin’s all-time high, which almost broke $20,000 this month. This is not improbably given that bitcoin opened the year around $1,000.
On the other hand, the unnamed options owner is not off to a great start. The price of bitcoin has stumbled in the last 24 hours, falling to a recent low of $15,2000 amid a controversy involving the popular exchange Coinbase, and the surge of a rival currency known as Bitcoin Cash.
http://fortune.com/2017/12/21/bitcoin-50000/
As the Wall Street Journal reports, an unnamed investor or investors have purchased a series of options contracts worth nearly $1 million. The contracts, sold on the LedgerX derivatives exchange, are “calls” that give the owner the right to pay $50,000 by late next year to purchase units of the popular digital currency:
The trade wagering on a move to $50,000 was the first of its kind on LedgerX. … Just under $1 million was paid for the options in one or more trades that took place during the 24-hour period ending at 4 p.m. Eastern Time on Wednesday, the records show. It is unclear from LedgerX’s data who the buyer or buyers were or whether the purchasing was done in multiple transactions or just one.
If bitcoin is below $50,000 on Dec. 28, 2018, the options will expire worthless, and the $1 million will be lost. If bitcoin rises above that level, the options will give their owners the right to buy 275 bitcoins for $50,000 apiece—a transaction that would cost about $13.8 million.
The call options represent an extremely bullish position even for Bitcoin since, as the Journal notes, they will be worthless if bitcoin doesn’t break the $50,000 mark by the end of next year.
Such an increase would represent an approximately 150% percent increase on bitcoin’s all-time high, which almost broke $20,000 this month. This is not improbably given that bitcoin opened the year around $1,000.
On the other hand, the unnamed options owner is not off to a great start. The price of bitcoin has stumbled in the last 24 hours, falling to a recent low of $15,2000 amid a controversy involving the popular exchange Coinbase, and the surge of a rival currency known as Bitcoin Cash.
http://fortune.com/2017/12/21/bitcoin-50000/
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