One of the reasons that long-only investors have succeeded in the Bitcoin market is that there is no effective way to short large amounts of Bitcoin. All that could change in a month’s time if CME launches its Bitcoin futures.
CME’s Bitcoin futures
CME’s announcement that it would launch Bitcoin futures in December 2017 provided a boost to Bitcoin’s price. The expectation is that Bitcoin futures would lend legitimacy to the asset class and you could see institutional investors entering the Bitcoin market. If Bitcoin futures were approved by the CTFC, then it would also be difficult for the SEC to block Bitcoin ETFs as the underlying would be a regulated asset.
However, Bitcoin investors might be missing the point. The launch of Bitcoin futures would provide bears with a means to short large quantities of Bitcoin; something which they cannot effectively do today. Speaking to CNBC, Terry Duffy, the Chairman and CEO of CME said: […]