FTX Traders Can Now Short the Pandemic, Long the Olympics
Crypto exchange lets users make money if they can predict a real world outcome.
- Cryptocurrency derivatives exchange FTX Exchange has introduced a new futures contract called OLY2021
- The futures contract will let traders speculate on whether the Tokyo Olympics will happen this year or not.
- The contract will expire at $1 if the Olympics happen and $0 if they are canceled.
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Traders on the FTX Exchange can now gamble on whether the Tokyo Olympics will take place this summer.
FTX’s Latest Prediction Market
Cryptocurrency derivatives platform FTX Exchange has introduced a new futures contract–OLY2021–serving as a prediction market for the likelihood of the Tokyo Olympics taking place this year.
The latest edition of the summer Olympics was initially scheduled for Jul. 24 to Aug. 9, 2020, but had to be postponed due to the ongoing pandemic. Now the event is scheduled for this summer.
However, rising cases of COVID-19 in Japan have fuelled speculation that Japan may have to cancel the sporting event altogether.
FTX Exchange’s OLY2021 futures contract will trade between $0 and $1 on with leveraged trading up to 100x. The futures contract will expire at $1 if the Olympics happen and $0 if they are canceled.
The Hong Kong-based exchange has also defined that it will declare Tokyo Olympics to have successfully taken place if, by Aug 9, 2021, a minimum of 15 medals are awarded across any sports.
The contract is currently trading at $0.65, which suggests more traders are betting that the Olympics will indeed happen.
This is not surprising given the Tokyo Olympics President Yoshiro Mori recently said the event was most likely going to happen regardless of the COVID-19 situation. “We will hold the Olympics, regardless of how the coronavirus looks,” Morti told Reuters.
FTX said the OLY2021 futures contract has a different risk profile compared to Bitcoin due to having “higher chances of making large moves ($0 or $1).”
Around the time of the 2020 U.S. elections, FTX similarity listed ERC20 tokens that let users speculate on whether ex-president Donald Trump would win or lose the elections.
Disclosure: The author did not hold crypto mentioned in this article at the time of press.