Hedge funds prepare a “big game” against bitcoin
Bitcoin, which has risen 13 times since the beginning of the year and more than a million percent over 7 years, runs the risk of earning the first serious hit in its life by American hedge funds, which in the coming month will have access to contracts for the most popular crypto currency in the world on three the largest US stock exchanges.
On December 1, the Commodity Futures Trading Commission of the United States (CFTC) authorized the launch of trades in derivatives for bitcoins: on December 10, bitcoin-derivatives will appear on Cboe Global Markets, December 18 – on the Chicago Mercantile Exchange (CME), and early in 2018 – at the exchange Nasdaq.
And although the crypto community expects from investors a record inflow of capital and builds forecasts about how much the course will jump, in fact bitcoin may be at risk of collapse: hedge funds, which are still kept away from cryptology, are waiting for the appearance of futures in order to get the opportunity to make rates on the fall of the crypto currency, Bloomberg reported more than ten sources in investment companies.
The fact is that now it is almost impossible to play against bitcoin, explains Alexei Mikheev, Chairman of the Center for the Development of Innovative Business.
Only a small number of exchanges make it possible to open short positions on bitcoin – in this case the crypto currency is borrowed, sold at the current exchange rate, and then it is repaid cheaper and returned to the owner, allowing the trader to earn at a price reduction. The growth of the rate, on the contrary, leads to losses.
The volume of such operations is scant, says Michael Moro, head of Genesis Global Trading: “On those exchanges that exist now, no one can come and shorten bitcoin by at least $ 1 million.”
With futures contracts, there will be no such restrictions for a downgrade game.