“Introducing futures contracts in the U.S. was meant to give short-sellers access to the market and improve liquidity, but availability is still fairly restricted,” said Lee Wild, head of equity strategy at Interactive Investor, in a note to clients. “The introduction of bitcoin futures on the Chicago Mercantile Exchange over the weekend may help, but it will take time.”
The ability to place a short bet on bitcoin without having to first borrow the underlying security is one of the appeals of the futures market. Trading volumes on the Cboe have been fairly low, which to some observers isn’t much of a surprise as the initial margin required to get exposure on both Cboe and CME is so big participation is largely dominated by institutional and high net-worth traders.
'We saw it drop 21% from November 8 through November 12.
And bitcoin doesn’t produce anything. Its price is based purely on what other people want to pay for it. And when people aren’t willing to pay that next price hike — and we will finally reach that point — bitcoin’s price will tumble.
At its heart, bitcoin is a speculation. It’s a bet. It’s a chance to risk a sum of money on the belief that something will happen.
You see that? Speculation. Bet. Risk.
Those aren’t words that you’d normally associate with a safe haven investment.'
Some will argue this is support for crypto, but the problem is crypto is not accepted as widely as cash. Perhaps if it became as ubiquitous as cash then crypto would have the same supporting argument - however crypto is nowhere near that yet!
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