Investing on cryptocurrency in this day and age has been considered modern-day gambling. This year alone, there are virtual currencies that have spiked in value by as much as 8,000%. For a lot, this is a bubble waiting to burst. However, there is also the possibility of squeezing some profits from cryptocurrency’s volatility.
There are financial analysts that are optimistic regarding Bitcoin’s value this 2018. Regardless of the recent correction that Bitcoin experienced after hitting the $20,000 mark this week wherein the cryptocurrency dropped as low as $12,500, many believe that the cryptocurrency is on its way up again by 2018.
In fact, there is/are an unnamed investor/investors that have purchased a good number of options contracts worth almost $1 million. The contracts were on the LedgerX derivative exchange.
If Bitcoin was below $50,000 by December 28, 2018, the options will expire and $1 million will be lost. On the other hand, if Bitcoin rises above the $50,000 mark, the owner/owners will have the right to buy 275 Bitcoins for $50,000 apiece. This transaction would cost around $13.8 million.
Is This Improbable?
Looking at the bullish trend of Bitcoin this 2017, starting at $1,000 at the start of the year and hitting $20,000, the cryptocurrency hitting the $50,000 mark isn’t really impossible. However, keep in mind that their bet really isn’t off to a great start since Bitcoin has plunged as low as $12,500 after hitting its highest price this week alone.
There are a good number of reasons to believe that the owners of the options have a fighting chance. One, corrections are quite normal after a bullish trend when it comes to Bitcoin. In fact, this also happened in September and November. Bitcoin even lost as much as 40% of its value in September. In addition to this, there is growing interest in other cryptocurrencies. Both well-known investors and common folks are now gambling not only on Bitcoin but even on other cryptocurrencies as other altcoins are also sharing a spike in their value over the last week alone.
According to Melten Demirors, director of development at Digital Currency Group that oversees cryptocurrency portfolio, “We are going through the biggest wealth generation opportunity of the century, and people want to participate”.
Chris Burniske, co-founder of Placeholder and co-author of Cryptoassets mentioned that “You do have people turning to it as that disaster hedge as much as they turn to gold”.
But of course, there are those individuals who are still hesitant to have a positive outlook on Bitcoin. According to Robert Shiller, a Nobel Prize-winning economist mentioned that “It seems like the dotcom bubble over again, or the housing bubble all over again”.
There are experts who are also worried about Bitcoin and other virtual currencies’ volatility. If cryptocurrencies are too volatile, then it really can’t function as a currency. However, there is also a chance that it could someday stabilize and even become widely used. However, when could this be? Also, up to when are people willing to wait?
Could Bitcoin reach $50,000 by 2018? In fact, no one could tell if there’s an impending bubble waiting to happen or the get-rich-quick hysteria is still going to run wild for the coming year.