Late in 2017, Ari Paul of cryptocurrency hedge fund BlockTower made a bet of sorts that Bitcoin would reach a price of $50,000 in a year’s time. The bet consisted of spending just under a million bucks on Bitcoin call options which would give him the opportunity to buy 275 bitcoins at $50,000 apiece any time between when the call options were purchased and Friday, December 28, 2018. Now, time’s up, and no late breaking miracle saved Paul’s million dollar bet on Bitcoin.
The loss didn’t come as a surprise to Paul or any other cryptocurrency experts. In an email to Business Insider about the state of the bet, he said that “we were not betting on or expecting” a rally in the price of bitcoins, and that contrary to a bet that would be won or lost, the call options were purchased as “a way for us to maintain exposure to an extreme rally while reducing overall crypto exposure.”
In the days leading up to the December 28th deadline, the value of Bitcoin was hovering at around $3,800 per bitcoin, and it was abundantly clear that Paul’s ambitious bet had long been lost. But Paul’s concept of the result of the bet being relatively unimportant is consistent – in a 2017 CNBC interview he described it as “not a bet that something will happen, but a bet that something could happen.”
Whether or not a $50,000 Bitcoin could have happened is more of a theoretical question, but as of this writing it’s sitting at just over $3,587 per, so such a rally would be a surprise, to put things mildly. There are other major cryptocurrency bets still in progress, though, as Cryptoslate notes, with Creek Digital Assets announcing a bet of its own
“Earlier in December, Morgan Creek Digital Assets publicized a bet that the Bitwise index fund of cryptocurrencies would outperform the S&P 500.”
The site says that it’s possible that Bitcoin could recover to that point sometime in 2019.
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