If you’re like most crypto investors, you may have already given up Bitcoin (CRYPTO: BTC). The world’s most popular cryptocurrency is down a staggering 47% since October, and is currently trading at just $72,000.
However, a surprising number of investors still play crime with Bitcoin. The easiest place to see this is in the prediction markets, where it is possible to place wild bet bets on the future price of Bitcoin.
Will AI create the world’s first trillionaire? Our team just published a report on a little-known company, called “Essential Dependency” that provides critical technology to both Nvidia and Intel. Continue »
Right now, Polymarket traders are giving Bitcoin a 4% chance of hitting $150,00 by June. And the look is very similar in Kalshi. There, prediction market traders give Bitcoin a 6% chance of topping $150,000 by the end of June.
On the surface, these may seem like very small differences. Imagine if your colleague told you, “There’s only a 4% chance you’ll show up at my office in June.” Or what if your child tells you, “There is only a 4% chance of passing my test in June.” Understandably, you will be a little worried. These are not good prospects.
But those 4% chances may not be as low as you think. For example, these are roughly the same odds as top golfers winning the PGA golf tournament these days, and there are plenty of people who bet on it.
For example, take a look at the prediction market for “Winner of the Masters Tournament”. Robin Hood Markets (NASDAQ: HOOD ). You can find $0.03 contracts for Justin Rose and Patrick Reed to win the Masters in April, indicating a roughly 3% chance of winning. There are only nine other golfers in the world with better odds.
So why do traders remain bullish on Bitcoin’s future prospects? The answer is simple: Bitcoin volatility. Simply put, Bitcoin is capable of making big moves, and that’s what drives investors.
From a risk aversion perspective, of course, volatility is bad. It can be hard to sleep at night when you have highly volatile assets. But from a risk-seeking perspective, volatility is actually good. This means that a cryptocurrency can absolutely explode in value.
View Bitcoin historical return data. In seven of the past 14 years, Bitcoin has delivered triple-digit returns. And some of those years were absolutely legendary. In 2013, the price of Bitcoin increased by 5,428 percent.
