from Hacker News

Call options used to bet that Bitcoin will go over $50K next year

by nvk on 12/21/17, 2:48 AM with 150 comments

• by d--b on 12/21/17, 9:20 AM

  People writing those article should know better, it's the wall street journal for god's sake. Buying a call option doesn't mean you're bullish that the future is going to trade up to that point. It could be a hedge for a short position or a way to go gamma-long or a way to make a structure cost-less, or really some other trading idea.

  The point is that if the price goes up, the call option price goes up faster, and then the trader can sell it before it reaches 50k. Liquidity though may be an issue.

  EDIT: what matters is that it is _possible_ that bitcoin goes to 50k next year. And since it is possible, people need to take that possibility into account in their strategies. It's like S&P option strike range for dec18, it goes from 1700 to 3100. Is it likely that SP price goes down to 1700 in the next year? no, but it's certainly possible.

• by geezerjay on 12/21/17, 6:58 AM

  A single call creates yet another far-fetched mass media piece to convince unsuspecting fools to spend their money pumping up the bubble. And so the pumping continues. The more far-fetched the story, the closer the burst is.

• by tobiaswk on 12/21/17, 2:32 PM

  Bitcoin is currently not what Bitcoin was when it was created.

  Slow peer-to-peer transactions High processing fees

  Average fees are approaching 40 dollars. That's an average. Unconfirmed transactions are at an ATH of 260k... has been at over 100k for weeks. The mempool is also at an ATH. The Bitcoin is crippled and nothing more than a "store of value". Sentences like "store of value" are now the term used to describe Bitcoin. Very far from what the Bitcoin used to be.

  I think there is a real possibility of a "death spiral of the blockchain". Fees will increase and it will become impossible to move coins on the blockchain besides the upper 10% of bitcoin holders.

  The fork that occurred on 1st August created Bitcoin Cash. This fork is much closer to what the Bitcoin was. Bitcoin Cash is this today. Removal of the segwit code (which hasn't solved anything), disabling of RBF (replace-by-fees) enabling 0-confirmation transactions again. A new DAA (difficulty adjustment algorithm). Finally increase the block size to 8MiB.

  The Bitcoin has been crippled on purpose by Blockstream deep in the pockets of bankers and insurance companies. Blockstream is the main contributor to the Bitcoin development. Look at the sponsors; https://www.blockstream.com/about/#investors

  Before the bankers, and their followers, got indirectly involved in Bitcoin development there never was any discussion about limiting the block size to 1MiB; in fact the opposite was discussed. See; https://twitter.com/adam3us/status/636410827969421312?lang=e... https://bitcointalk.org/index.php?topic=1314.msg15143#msg151... https://np.reddit.com/r/btc/comments/71h884/pieter_wuille_im...

  Now all of this has led to a complete divide and clusterfuck of the community. It is an very ugly and toxic environment and is sad to look at. On top of that we now have thousands of alternative coins and blockchains.

  Just my 2 cents ;) Happy Christmas and new year to all!

• by Nursie on 12/21/17, 9:18 AM

  Honestly at this point nobody can really make predictions for the short or medium term. There's not much in the way of underlying use of BTC as anything but a gamble here, and the tech enthusiasts/crypto-libertarians have been massively outnumbered by the bandwagoneers and FOMO.

  The Bitcoin bubble could explode tomorrow or next year or just possibly it could find a way to become self sustaining (seems unlikely). It could repeat the crash-peak-crash pattern. It could do anything and analysis seems essentially pointless.

• by thisisit on 12/21/17, 9:55 AM

  This looks like an uninformed ad for LedgerX.

  For god's sake, no one in their right mind trades naked options - neither the seller nor the buyer. Given the historical volaitity of bitcoin rising from 1000 to 16000, it shouldn't be surprising at all that someone wants to hedge (a concept which seems alien to the writers) their positions.

  The missing information is - what premium did it cost to secure the trade? Well, as per the data ~ $3600, which at current price is nearly 20% of the current price. Very costly premium for a very volatile product.

• by jjoe on 12/21/17, 9:43 AM

  I'm curious about how people's arguing about Bitcoin's prospects correlates with their cryptocurrency holdings.

• by Nokinside on 12/21/17, 12:00 PM

  Is it possible to rationally manipulate and speculate using bitcoin or do you have to be a believer?

  Two year Bitcoin volume when measured in BTC seems relatively stable while the price goes up and up and new speculators come in. As long as the price goes up the same pace as demand, there is no upper limit to the price level that steady supply of bitcoin can support.

  At the same time the market gets thinner and thinner relative to the bitcoin wealth. At some point the social mania around bitcoin peaks and speculators want to liquidate more than there is buyers.

• by Kiro on 12/21/17, 8:44 AM

  Is this really a risky bet? I wouldn't be surprised if we hit $50k within a few months.

• by laurencei on 12/21/17, 1:56 PM

  So if you "thought" that Bitcoin will go over $50k - why not buy the Bitcoin itself now at $20k (or whatever it is today)? i.e. what is gained with the call option here?

• by mikehines on 12/21/17, 9:14 AM

  Bitcoin is the new diamond, perhaps even more unethical and irrational.

• by koliber on 12/21/17, 3:14 PM

  Somebody bought these options. That person is betting that Bitcoin will go over $50k next year.

  Somebody also sold these options. That person is betting that Bitcoin will NOT go over $50k next year.

• by DavideNL on 12/21/17, 11:38 AM

  a bet... placed by a Bitcoin millionaire, to make the crypto-currency frenzies buy some more Bitcoin?

• by candiodari on 12/21/17, 2:46 PM

  Okay ... options discussed on a tech forum. The next crash can't be far away ...

• by rbx on 12/21/17, 12:12 PM

  Can bitcoin be "damaged" by quantum computers?

• by runeks on 12/21/17, 8:48 AM

  Paywalled. How do I read the whole story?

• by WheelsAtLarge on 12/21/17, 6:47 AM

  That's more like a billion-dollar bet. Ask the Winklevoss twins.