Bitcoin traders and watchers have been busy heralding the entrance of
cryptocurrencies futures. What they should really be focused on is the
exit.
The first 24 hours of the Cboe Global Markets Inc.'s bitcoin
futures contract went pretty well.
By Monday evening, 3,969 of the
Cboe's main January contracts had been bought and sold -- not big by
established futures market standards, but more than many people
expected. With some brokers barring shorting, there was some concerns
that buyers wouldn't be able to find sellers.
That didn't happen. There
also wasn't a huge flood of people waiting to bet against bitcoin and
driving the price of the contract down. Instead, it ended up $3,545 on
the day at $18,545. Bitcoin rose, too. As much as bitcoin bulls
might want to use the smooth start of trading to contend that the
cryptocurrency and its price are more solid than critics contend, the
real test won't come until Jan. 17.
That's when the Cboe's first main
contract expires. And as any futures trader knows, getting out can be
trickier than getting in.
Less Buzz
There
already are some troublesome signs. On Tuesday, the price of the
January contract was down $815, and volume was much lower in the second
day of trading.
But the biggest problem could be the persistent, and
unusually large, gap between the price of bitcoins and the futures
contract. That spread was more than $1,000, or 6 percent, as of Tuesday
morning, though it had been double that a day earlier....continue reading on Bloomberg: https://www.bloomberg.com/gadfly/articles/2017-12-12/bitcoin-bulls-should-focus-on-futures-exit-not-...
cryptocurrencies futures. What they should really be focused on is the
exit.
The first 24 hours of the Cboe Global Markets Inc.'s bitcoin
futures contract went pretty well.
By Monday evening, 3,969 of the
Cboe's main January contracts had been bought and sold -- not big by
established futures market standards, but more than many people
expected. With some brokers barring shorting, there was some concerns
that buyers wouldn't be able to find sellers.
That didn't happen. There
also wasn't a huge flood of people waiting to bet against bitcoin and
driving the price of the contract down. Instead, it ended up $3,545 on
the day at $18,545. Bitcoin rose, too. As much as bitcoin bulls
might want to use the smooth start of trading to contend that the
cryptocurrency and its price are more solid than critics contend, the
real test won't come until Jan. 17.
That's when the Cboe's first main
contract expires. And as any futures trader knows, getting out can be
trickier than getting in.
Less Buzz
There
already are some troublesome signs. On Tuesday, the price of the
January contract was down $815, and volume was much lower in the second
day of trading.
But the biggest problem could be the persistent, and
unusually large, gap between the price of bitcoins and the futures
contract. That spread was more than $1,000, or 6 percent, as of Tuesday
morning, though it had been double that a day earlier....continue reading on Bloomberg: https://www.bloomberg.com/gadfly/articles/2017-12-12/bitcoin-bulls-should-focus-on-futures-exit-not-...