LedgerX Sees Biggest-Ever Bitcoin Options Bet For $1 Million USD That BTC Will Become Valueless
When Bitcoin was peaking, some people got overhyped about all of its potential. Now, the biggest (and possibly the worst) Bitcoin bet is about to expire and become simply worthless. This option was purchased by almost $1 million USD on LedgerX when Bitcoin was at its top.
The call was that it would reach the price of $50,000 USD before December 28. It is December now and it is pretty clear that that is not going to happen, as Bitcoin is below $4,000 USD at the time of this report. Bitcoin would have to rally up to 1,400% of its current price in order for this happen and we all know that this is a crazy bet to make today.
Not The End of The World
While it does look like this is a horrible outcome for the buyer of the tokens, the situation may not be as dire as it seems. Ari Paul, a crypto fund manager that works at BlockTower Capital, made a bet but he had a sort of insurance.
At the same time that the made the bet of almost $1 million USD, he also sold his Bitcoin holdings, which he had bought for a smaller price before. This, he affirmed back then, helped him to reduce his exposure to any market decline that could make him lose the money if Bitcoin never actually rose to that price.
Selling some Bitcoin on call options was very profitable at the time as the price of Bitcoin was $16,200 USD. By using the calls to capture upside and reducing downside risk, the former portfolio manager of the University of Chicago did not lose all of his money at least.
Even with one of the worst bear markets ever happening now, this gave him some comfort in case things turned out bad and indeed they did.
LedgerX, which was famous for being the first fully regulated Bitcoin options exchange in the United States, declined to talk more about the case, as did BlockTower.