Home Finance Crypto news Trader Takes $20M ‘Butterfly’ Bet to Guard Against Bitcoin (BTC) Price Dropping to $47K

Trader Takes $20M ‘Butterfly’ Bet to Guard Against Bitcoin (BTC) Price Dropping to $47K

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Trader Takes $20M ‘Butterfly’ Bet to Guard Against Bitcoin (BTC) Price Dropping to $47K

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The strategy will earn maximum profit if bitcoin falls to $47,000 on the expiry day. The forecast, therefore, is for prices to drop in the next few weeks but not below $47,000. The payoff diagram shows a maximum profit at the center and a fixed loss in case prices breach the two ends, mimicking the body of a butterfly. Hence, the strategy is called a “butterfly” bet.

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