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Blocktower capital CIO set to lose Bitcoin cash options worth close to a million dollars

Alan Muli



Ari Paul, formerly a portfolio manager at the University of Chicago and current CIO at Blocktower capital is set to lose Bitcoin cash worth close to a million dollars. This is after the CIO made what is considered one of the most speculative plays using BCH in December 2017.

Ari Paul bought options worth a million dollars in 2017, the point at which the cryptocurrency bubble was at its peak. At the time, Bitcoin was trading slightly above $ 16,000. Call options have a strike price of $50,000 at the moment and thus the market would have to spike by over 1400 percent for the contracts to retain value. The cash options will expire to be worthless should prices fail to stay above the $50,000 mark. If the tide falls in Paul’s favor, he will be entitled to 275 Bitcoin cash valued at $50,000 each totaling to $13.8 million.

“Contracts for $40,000 calls are trading for $9.60 on Deribit,” posted Twitter-based crypto-commentator Bambouclub. This means that Mr. Paul has already incurred a 99.73 percent loss. The $50,000 calls were each purchased at $3,600.

Mitigating risks

In an interview with CNBC published on the 26th of December 2017, Paul confirmed that he had bought the options. “I think it’s not quite as interesting as people make it out to be. I took the position in the interest of mitigating the risks of my fund’s portfolio,” stated the CIO. He went on to further remark, “I would not recommend most people to buy these options. I manage cryptocurrency portfolio and I am trying to make it accessible to investors. I am also very focused on risk management.”

Some have argued that all is not lost, it remains to be seen whether the Blocktower capital CIO made the right move. Cryptocurrencies have had a very rough year, the roughest ever in their history and things are looking gloom for crypto-investors.

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