RATE Group | Bitcoin derivatives that cost $1m will soon be worthless
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Bitcoin derivatives that cost $1m will soon be worthless

06 Dec Bitcoin derivatives that cost $1m will soon be worthless

Posted at 15:09h in Bitcoin News by

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The biggest-ever bet on Bitcoin options is about to expire worthless.

Purchased for almost $1 million on LedgerX’s trading platform just days after Bitcoin peaked a year ago, the call options have a strike price of $50,000 and an expiry date of December 28, 2018. For the contracts to retain any value at expiry, Bitcoin would need to rally more than 1 200%.

The options’ almost certain wipeout is a less-than-ideal outcome for the buyer, but it may not be quite as bad as it seems.

Ari Paul, a cryptocurrency fund manager at BlockTower Capital, has indicated that he bought the options while simultaneously selling some of his fund’s Bitcoin holdings. In a December 2017 interview with CNBC, Paul said the trade allowed him to lock-in some profit, reduce exposure to market declines and potentially earn a big payout if Bitcoin soared above $50 000.

When the options were purchased, causing a stir in crypto circles, Bitcoin was trading at about $16 200. The virtual currency has since…

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