To put it another way, option traders are not sure if bitcoin will trade above the $8,000 mark four months after reward halving – supposedly a price-bullish event. The probability stood at 65 percent a week ago when bitcoin was trading near $10,000, Skew’s co-founder and chief operating officer, Emmanuel Goh, told CoinDesk.
An option is a derivative that trades contacts between buyers and sellers, giving the purchaser the right but not the obligation to buy or sell the underlying asset at a specific price on or before a specific date. A call option gives its owner the right to buy something while a put option gives the right to sell.
Bitcoin is set to undergo its third mining-reward halving sometime in May 2020. As the name suggests, the rewards per block mined will be halved from current 12.5 BTC to 6.25 BTC. The process is repeated every four years and is aimed at curbing inflation in the cryptocurrency.
“In approximately 200 days (69 days unil the halving) buying [one] bitcoin will be out of the reach of 99.8 percent of the population of the earth,” Jason Williams, co-founder and partner at Morgan Creek Digital tweeted on Sunday. Read More...