BlockTower Capital, which manages more than $130 million in client assets, made a $1 million bet last year that bitcoin's price would rise above $50,000 by Friday.

On Friday, the call options expire, and the firm will lose $1 million unless the bitcoin jumps from its current price of roughly $3,700 to more than $50,000.

If the price gets that high, the crypto hedge fund will be able to buy 275 bitcoins at $50,000 apiece through the bitcoin-derivative platform known as LedgerX.

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It was a shocking bet even when it was made during bitcoin's sharp rise last year: $1 million that by the end of 2018, bitcoin would be worth more than $50,000.

The bet, made by the crypto hedge fund BlockTower Capital, would have given the manager the chance to buy 275 bitcoins at $50,000 apiece — any time before Friday, when the call options expire, a purchase that would have cost $13.8 million. The manager spent just under $1 million on those call options.

Bitcoin is currently trading at less than $4,000 per coin — a drop of more than 80% from its peak of $19,783, when BlockTower made its bet.

BlockTower — a Stamford, Connecticut-based manager that runs more than $130 million in client assets and has a minimum investment of $1 million — defended the purchase of the options at the time as a way to "risk a little to win a lot," according to the manager's cofounder Ari Paul. In a CNBC interview a week after the firm bought the options, Paul said "it was not a bet that something will happen, but a bet that something could happen," and that he liked the odds and payout of the move.

In an email to Business Insider earlier this month, Paul wrote that "we were not betting on or expecting" a bitcoin rally.

"In contrast, the options were a way for us to maintain exposure to an extreme rally while reducing overall crypto exposure," he wrote.

Paul declined to say if he had any other options out of bitcoin's future price.