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Looking Into Crystal Ball: LedgerX Introduced Its First Bitcoin Long-Term Option

What happened

Bitcoin trading platform LedgerX now offers its first Long-Term Equity Anticipation Securities (LEAPS). The contract on those is set to expire on December 28th, 2018.

What does that mean?

Option buyers will have the right to buy Bitcoin for $10,000 on December 28th next year. It’s around 30% higher than today’s price. Literally, it’s like buying futures in hopes that they would cost much more in a year time.

How will it work?

Unlike futures, buyers don’t really have to buy Bitcoin next December. If by the expiration date the price is lower that $10K, LedgerX will collect $2,250.25 trade fee. If the market price of Bitcoin is higher by then, then the buyer can get it at a set strike price.

What can we learn from it?

  • Futures might be the key to Bitcoin adoption – just recently we wrote about Man Group, a large British hedge fund, who plans to add cryptocurrencies to its portfolio if CME group manages to launch Bitcoin futures.
  • According to LedgerX, two institutional investors already took the deal – most likely, in a hope that Bitcoin will keep its current growth rate.
  • However, cryptocurrencies’ market sees big rises and drops every day – so trying to predict the price at the exact date is just the same a looking for answers in a crystal ball.
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