The crypto market may have gone through a rather volatile period over the last few months, but things get thicker when people start losing million dollar bets due to it. Ari Paul is one guy who placed an informal bet and lost big time. Paul works for BlockTower, a crypto hedge fund.
Towards the end of 2017, Paul became opinionated about how far the price of Bitcoin could soar. Mind you, the end of 2017 was the period in which Bitcoin reached its all-time-high price of about $20k. In that sense, anyone could have expected the crypto market leader to score even more gains in the subsequent year of 2018. At the time of his betting, Paul speculated that Bitcoin could hit a cool $50k by the end of 2018. The final date was capped as 28th December 2018.
It Didn’t Happen
The bet Paul made wasn’t really a formal kind of bet where someone could lose or gain money, but rather a speculative form of exposure where he estimated to spend under $1 million to purchase bitcoin call options and buy around 275 Bitcoins at the value of $50k each, with the period counting down from the time the options were purchased and the end of the betting period – which, as earlier stated, ran up to Friday 28th December 2018.
However, Paul’s bet fell through as the crypto market took a bearish toll for the better part of 2018. By the stipulated date, Bitcoin was trading at a measly $3,800, making the bet expressly lost. Asked about it on a call with the Business Insider, Paul explained that the bet wasn’t a definite speculation to state that the Bitcoin price would $50k, but rather an opinion that it could happen. That explanation echoes what he had explained earlier on in an interview with the CNBC back in 2017.
Ari Paul isn’t really the first person or institution to announce a bet in the crypto world. There are still some bets in progress made by various other entities. For example, in December, Morgan Creek announced a bet of its own, speculating that the S&P 500 would eventually be outperformed by the Bitwise index fund that’s used for cryptocurrencies.