US crypto derivatives provider LedgerX is giving investors the opportunity to bet on a particularly bullish scenario for Bitcoin (BTC).
Bloomberg reported earlier today that LedgerX unveiled a call option that pays off if the original cryptocurrency’s price surpasses $100,000 by December 2020. The option would be the LedgerX’s first offering after the company won a licence for a designated contract market (DCM) from the US Commodity Futures Trading Commission (CFTC). The licence, which was issued last month, allowed the firm to offer physically-settled crypto derivatives to retail investors.
Bitcoin’s currently trades at around $9,200, as its price dropped below the $10,000 mark in late Tuesday trading. The digital coin has seen some challenging trading in the past few sessions amid a market-wide correction and concerns over Facebook’s Libra project, which have prompted US lawmakers to question the social media giant’s blockchain chief David Marcus over the upcoming stablecoin.
Despite the recent decline, some of LedgerX’s institutional clients have shown interest in the option.
“Often what happens is the first trade is the most important, and everybody else watches it,” LedgerX’s chief executive officer Paul Chou said in a phone interview with Bloomberg.
“Dozens and dozens of these institutions got back to us saying we’d be interested in trading a contract like this,” Chou added. “I understand $100,000 is a large number, but a lot of us who’ve been in this space remember Bitcoin at $1, and then it hit $10 and $100 and $10,000. A $100,000 contract doesn’t even make us blink.”
In today’s trading, the Bitcoin price stood at $9,208.94, as of 13:00 BST. The digital coin has lost 13.8% of its value in the past 24 hours, according to data from digital currency tracker Coinmarketcap. The coin’s total market capitalisation currently stands at $164.1 billion, which represents 65.9% of the combined value of all digital currencies.
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