According to Business Insider, Ari Paul, the chief information officer and co-founder of cryptocurrency hedge fund Blocktower, has purchased $1 million worth of options that offers a 30-fold payout if the bitcoin price hits $50,000 by the end of 2018, on behalf of Blocktower.

“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.”

Blocktower’s $1 Million Bet

Immediately after the initial report on the $1 million bet placed on LedgerX by the Wall Street Journal, Paul tweeted:

I wonder who bought these? 😉 https://t.co/gIXFW0d0hm

— Ari Paul (@AriDavidPaul) December 21, 2017

At the time, prior to the disclosure of the investors behind the call, LedgerX CEO Paul Chou hinted that an institution has made the call, not an individual.

“Without a doubt, there are institutions out there that are looking at these types of trades or have done these types of trades. It’s not an individual, let’s put it that way.”

In an interview with CNBC’s Fast Money, Paul explained that the option contracts Blocktower has purchased expire if the price of bitcoin fails to reach $50,000 by the end of 2018. But, if it does, it pays out the firm on a 30 to 1 odds. Hence, a $1 million bet on the LedgerX options platform on the price of bitcoin achieving $50,000 would generate Blocktower a $29 million in profit.

The option contracts Blocktower purchased expire by the end of 2018, but are available for cash in anytime throughout the year. If the price of bitcoin surpasses $50,000 earlier than December, the contracts can be cashed in.

The man who bet $1M that #bitcoin could hit $50K by the end of the next year breaks down his call @AriDavidPaul pic.twitter.com/Xj3R0Eqfuz

— CNBC’s Fast Money (@CNBCFastMoney) December 26, 2017

“This call costs $3,600. If bitcoin settles anywhere below $50,000 next year, it will expire worthless. But if bitcoin goes to $100,000, it pays 30 to 1 [30-fold]. Bitcoin is volatile. This is a hyper volatile asset. Bitcoin is up more than 1,400 percent this year. It also falls 30 percent almost every other month. These calls are a bet that if its volatile to the upside we can easily see over $50,000 next year,” Paul explained.

Why are Investors so Optimistic?

If the price of bitcoin reaches $50,000, it would place its market valuation at over $1 trillion. Given that the market cap of gold is at around $8 trillion, it would elevate bitcoin to an optimal position to challenge gold to evolve into the world’s premier store of value and currency.

Investors are highly optimistic in the price trend of bitcoin because of the exponential increase in its adoption. In 2017 alone, some of the global market’s largest financial institutions including the New York Stock Exchange (NYSE), Chicago Board Options Exchange (Cboe), Nasdaq, Cantor Fitzgerald, Goldman Sachs, and JPMorgan have publicly expressed their support for bitcoin.

Governments of leading bitcoin markets such as Japan, the US, and South Korea have implemented practical regulations to facilitate the growth of bitcoin businesses, instead of restricting it.

Until the end of 2017, the price of bitcoin has been able to reach $15,000 without the entrance of institutional investors. With tens of billions of dollars in institutional money expected to flow into the bitcoin market, investors have become extremely confident in the growth trend of bitcoin in the long-term.