Participants in the cryptocurrency market got the opportunity to put on the rise in the price of bitcoin to $ 300,000 by the end of this year. Options with such a strike price were added to its platform by the Deribit derivatives exchange.
Deribit hit a $ 200,000 option last week, but Bitcoin’s continued rally to new highs prompted the exchange to give customers the option to place even higher bets.
Such an option gives its holder the right to purchase bitcoin for $ 300,000, and the seller cannot refuse, even if the cryptocurrency is traded significantly above this mark. Despite the low chances of execution, in these options traders are attracted by the low cost of the contract and the potentially colossal profits.
To reach this mark, Bitcoin must grow by another 650%, which so far exceeds the most daring forecasts of serious analysts. The exception is Tom Fitzpatrick of CitiBank, who in November predicted a rise to $ 318,000 by the end of this year and called Bitcoin “the gold of the 21st century.”
“Time will tell if we see such high levels, but the background and price action clearly indicate the potential for an upward movement over the next 12-24 months,” he wrote.
“Remember, if you own BTC and are going to sell about $ 300,000 anyway, selling a covered call is essentially easy money. I’m more interested in what the takers are thinking, ”says a Hasu user.
The mentioned strategy implies that the trader not only sells the option, but also holds the position on bitcoin and thus makes a profit from it if the scenario with the rise in the bitcoin price to $ 300,000 is executed. At the same time, the strategy of bare selling will be extremely risky, as how the seller could potentially rob himself of the profits from multiple price increases for the relatively small premium paid to him by the buyer.
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