Has the fact that the price of a single bitcoin has risen nearly eight-fold so far this year prompted you to turn bearish on the world's most valuable digital currency?
Well, here’s your chance to short it.
A Swiss asset-management firm called Vontobel launched a new futures product on Friday that will make it easier for retail investors to short bitcoin.
Bitcoin of course recently bounced back to all-time highs after a more-than $1,000 drop last week. Traders who were short made a killing on their positions. But cashing in on the drop would’ve been far easier with new futures products designed to let customers bet against the bitcoin price.
The contracts, which will trade on the SIX Exchange, will enable investors to profit even if the currency – which has proven vulnerable to vicious selloffs – falls in value. According to Reuters, the company will release two mini futures, a type of derivatives instrument that represents a fraction of the value of standard futures, making it easier for retail traders to access the market.
According to Eric Blattmann, head of public distribution of financial products at Vontobel, the news comes at a time when traditional traders are simply looking for more options when it comes to trading cryptocurrencies.
Swiss investment solutions provider Leonteq Securities AG also announced the launch of a separate product. Leonteq’s product has a two-month maturity, while Vontobel’s is longer, but investors can of course exit their positions early since each product will trade on an exchange.
He said in statements:
"We have seen big demand for our long tracker certificate from investors interested in playing the upside potential of bitcoin and now they have also the possibility to hedge their position or go short."
Manuel Durr, head of public solutions at Leonteq, said clients appreciate being able to open long or short positions in bitcoin.
“The initial feedback has been extremely positive,” said Manuel Dürr, head of public solutions at Leonteq. “Clients do very much appreciate the possibility of choosing between a long or a short investment in bitcoin.”
The move comes after US derivatives exchange CME Group announced it would start trading bitcoin derivatives next month.
Already, New York-based startup LedgerX is offering live cryptocurrency futures trading, with $1 million traded in its first week.
While some exchanges have allowed customers to open short positions on margin, the Vontobel contract has become the easiest way for retail traders to short the digital currency. We wonder: Could this help inject more two-way volatility and slow, or perhaps even reverse, bitcoin's meteoric rise?
But if you’re looking to short the world’s most valuable digital currency, The Vontobel mini-futures are probably your best bet.