According to The Wall Street Journal, in contrast to the petty traders who are mainly betting on the rise of bitcoin, hedge funds and large traders are mostly bearish.
A futures contract is a contract through which traders can bet on price growth, and its decline. According to the Commission commodity futures U.S. (CFTC), the holders of at least 25 futures contracts on bitcoin on the CBOE, some of whom are retail investors, betting on a price decline to 3.6 times less than that it will grow. Among trading firms, including managers of funds from outside investors, short positions open in 2.6 times more than long.
Data on futures that are traded on the platform of CME Group, the CFTC does not.
However, the base cost is still being formed on how small and large traders take the bitcoin. The cryptocurrency boom last year, when retail investors around the world bought bitcoin, contributed to the fact that the rate of bitcoin has increased over the year by 1330%, and today it is trading above $ 15 000 dollars.
The CFTC data also reflect the mood of many skeptics on wall street. More conservative companies consider bitcoin a bubble and therefore tend to bet on the downside. Many banks and investment managers, virtually ignore futures bitcoin.
Stephen Sanders, managing Vice President, Interactive Brokers Group is a brokerage company that gives its clients access to futures bitcoin noted that «in the retail segment, probably more optimistic than institutional». Futures on BTC gave the pessimists an opportunity to profit from their beliefs, playing on the slide.
However, according to the CFTC, at the end of December last year, bearish sentiment was more pronounced. While the ratio of short positions to long was 1 to 4. Today, the hedge funds and managers asset management opened a short position just 40% more than long. However, talking about the turnaround yet.
At the same time, the WSJ noted that shorting can be a part of certain trading strategies, such as «spreading» when the company opens the short and long positions simultaneously. Therefore, the opening of short positions on the futures market for bitcoin does not necessarily mean that the trader is waiting for the collapse of prices.
Overall, it is worth noting that the trading activity of futures on bitcoin is still very weak in comparison with the volume of cryptocurrency exchanges. If you compare with the common market of bitcoin, and now the total volume of futures contracts on the CBOE and CME is only about $ 150 million compared to 300 billion capitalization of bitcoin. Therefore, the futures markets still have little effect areá prices.
One of the factors for this slow growth is that many banks on wall street do not want to deal with bitcoin. For example, JPMorgan Chase and Merrill Lynch declined to provide its customers access to cryptocurrency derivatives.