While Bitcoin has endured peaks and valleys in its value in the past, it will take years for the market to recover and reach another peak. Either way, everyone is wondering what the future will hold for Bitcoin.
The million dollar bet
As Bloomberg explains, Paul bought $1 million in call options last year, while selling some of his fund’s Bitcoin holdings at the same time. "These calls let me capture upside while reducing my downside risk," he said of the deal, in an interview with CNBC. In a tweet, Paul went on to say that it was a profitable endeavor.
In the interview, Paul stated that trade allowed him to secure some profits, cut exposure to declines in the market and, potentially, have a big pay day if Bitcoin value surpassed $50,000.
But now, those call options are probably worthless. As reported by Bloomberg:
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 Dec. 28, 2018. For the contracts to retain any value at expiry, Bitcoin would need to rally more than 1,400 percent.
When Paul bought the options, Bitcoin was selling at around $16,200.
Bitcoin value plummets
Bitcoin has had its share of ups and downs on the marketplace over the last decade. As The Independent reports, the cryptocurrency market is practically infamous for its erratic nature.
Mati Greenspan, a senior market analyst at the online trading platform eToro, tells the The Independent, "In the past nine years, the cryptoasset market experienced five major corrections with an 85 per cent drop in value on average."
"On this occasion, for bitcoin to record the same 85 per cent drop, its price would have to fall to $2,950," she adds.
Bobby Lee, co-founder of the Hong Kong-based bitcoin exchange BTCC and famed investor, posits Bitcoin will fall even harder, predicting the market will fall by another $1,000 at minimum.
"If history repeats perfectly, then the current bear market for #Bitcoin would bottom out at $2,500 next month, in Jan 2019," Lee posted on Twitter.
"And then the next rally would start in late 2020, peak out in Dec 2021 at $333,000, and then crash back down to $41,000 in Jan 2023," the tweet continued.
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