The Wall Street Journal reported earlier this week that a trader or group of traders made a $1 million bet on bitcoin going to $50,000 by next December.

People familiar with the matter told Business Insider that it was the hedge fund BlockTower Capital.





On Wednesday, an unidentified entity made a $1 million bet on bitcoin trading above $50,000 by next December.

The cryptocurrency hedge fund BlockTower Capital was behind the bet, people familiar with the matter told Business Insider.

The Wall Street Journal first reported the bet, made on LedgerX, a cryptocurrency options exchange. At that point, it was unclear whether one entity was behind the options bet and whether it was made up of one or more trades.

The call options expire December 28, 2018, and would give BlockTower Capital the ability to buy 275 bitcoins at $50,000 a coin, should the cryptocurrency reach that price.

BlockTower Capital is among the best-known crypto hedge funds in a booming space that now includes over 175 such firms, according to the fintech analytics firm Autonomous Next.

BlockTower was founded by Ari Paul, formerly of the trading firm Susquehanna, and Matthew Goetz, a former vice president at Goldman Sachs.

Paul tweeted about The Journal story on Thursday:

He followed up by saying: "One thing to understand with options: a deep out of the money call is not a bet that something *will* happen, it's a bet that something *might* happen. Risk a little to win a lot."

Bitcoin has been under pressure this week as bears storm the market. On Friday, it was trading down 16%, at $12,970, as the entire cryptocurrency market shed over $100 billion in market cap in just one day.

Still, bulls remain resolute that better days are ahead for the crypto market.

"The holidays are a notorious time for crypto prices to drop — that has been the case over the past several years," said Dan Novaes, the CEO of Current Media, a blockchain technology company.

He added: "After the holidays, I expect the prices to rebound."