Found a trader

Found a trader who has put a million dollars on bitcoin

Found a trader who has put a million dollars on bitcoin
Found a trader who has put a million dollars on bitcoin

Found a trader who has put a million dollars on bitcoin

On Wednesday, an unknown trader bet a million dollars that bitcoin will surpass the $ 50,000 mark by the end of next year. No one knew who was behind this bet, and whether it was a risky venture or part of a larger investment strategy. At least part of this puzzle has been solved..

According to Business Insider, the option buyer was Blocktower Capital, a cryptocurrency hedge fund..

“Blocktower Capital is one of the most famous cryptocurrency hedge funds. According to the analytical company Autonomous NEXT, today there are 175 such funds. Blocktower Capital was founded by Ari Paul, a former Susquehanna trader, and Matthew Goutz, a former vice president of Goldman Sachs, “Business Insider writes..

Shortly after posting an article about buying an option in the Wall Street Journal, Paul tweeted, “I wonder who it could be?”

Paul later added: “One thing to understand is that a call that is well above the current market price is not a bet that something will happen. It is a bet that something might happen. Take a chance small to win a lot “.

Now that we know who the buyer is, another, even more interesting question arises: Who is the seller??

Bloomberg suggests that it may be one of the whales who found a way to withdraw capital without putting pressure on the market.

Let’s not forget that only one million dollars was transferred at the conclusion of the transaction, and the rest of the amount ($ 13,750,000) will be transferred at the time of direct settlement. Bloomberg draws attention to the fact that this transaction may matter not so much because of the extremely optimistic attitude of the buyer, but because of the opportunities it gives the seller..

“I spoke with several large Bitcoin holders who have been holding for several years and have never sold. All of them are interested in such deals. It is natural that the so-called bitcoin billionaires, of which there are about 1,000 people, each of whom has an average of $ 350 million, reduce their presence in exchange for fiat “.

In addition to providing an opportunity for the withdrawal of large capitals, such a transaction has a stabilizing effect on the market.

“One trade does not make the market, but what if, say, we take 1% of the bitcoins from the market and use it as collateral for an option, and the investor provides fiat, the payout of which is stipulated by the annual derivative … This can significantly stabilize the market. Such a deal not only reduces volatility, but also that market prices match real Bitcoin prices in institutional volumes. This could make CBOE and CME futures more attractive and even create a solid base for Bitcoin ETFs. “.

Finally, the increased level of transparency that such facilitate transactions will lead to the fact that large investors will feel more confident in this market, and therefore invest more money..

The converse is also true: if large Bitcoin holders do not interact with the market, institutional investors will have difficulty accessing it. In this case, individual traders will be able to trade small volumes on scattered markets or freely regulated exchanges, which, however, does not contribute in any way to the provision of futures and ETFs with real bitcoins: their price, as now, will be influenced by people who do not own bitcoins..

But as Bloomberg points out, this isn’t necessarily a bad thing. “After all, bitcoin was created as an alternative to financial markets. He worked pretty well for several years without any Wall Street connection. This is one of the possible paths for the development of cryptocurrencies, the path of a parallel financial system. But many people would like to see the two systems reunite. The first deal has just been made before our eyes, which could help their dreams come true. “.

Thus, the success of the Blocktower Capital transaction may not be a consequence of the rise in the bitcoin rate to $ 50,000 and above in the next 12 months, but its reason, since it is such transactions that allow whales to dump some of their assets , and institutional investors to enter the market.

Ari Paul himself is not worried about yesterday’s correction and writes: “A major liquidation of assets with prolonged strengthening at lower levels is the healthiest scenario the cryptocurrency market can only go. Today, less than 50 million people own bitcoin. I wish there were more of them “.

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