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The dark side of futures: hedge funds set against bitcoin growth



Prior to the statements of CME Group and CBOE on the launch of the bitcoin futures, leading hedge funds kept aloof from the digital currency market, but now are firmly committed to mastering the new financial instrument. However, some experts warn that these organizations can initiate a powerful "bearish tendency" in the crypto-active market, Cryptocoinsnews reports .


According to Professor Craig Pirron, the emergence of derivative financial instruments tied to the bitcoin course will cause the number of short positions to grow, potentially leading to a significant drop in the price of the first crypto currency.

Recently, the volatility of the exchange rate is particularly noticeable: in November the price of bitcoin increased by 72%, and then collapsed by 20% in just 90 minutes after reaching $ 11,000 for bitcoins. Such conditions on the market of crypto currency attract traders who are trying to open a short position for getting a "quick" profit on a sharp correction.

It is these players who are eagerly waiting for the launch of futures, but a significant number of large investors view the event as an opportunity to open a long position taking into account the long-term positive effect of introducing bitcoin into the traditional financial system. This is the opinion of the former portfolio manager of the investment company BlackTower Capital Ari Paul.

As Seo notes the trading company Genesis Global Trading, Michael Moro, the existing trading platforms for crypto-currencies provide limited opportunities for placing short positions, which significantly limit the "bearish" trends. However, he is convinced that index futures will radically change the state of things.

Earlier, the Chicago Mercantile Exchange announced the launch of index futures for bitcoin on December 18. Its closest competitor, the Chicago Stock Exchange, intends to present the new product to the financial market on December 10th.