A world expert in financial options has warned that those hoping to use the creation of contracts allowing investors to bet against the spiralling price of bitcoin were doomed to lose money.
Nassim Nicholas Taleb, an authority on derivative markets, said that there was “no way to short the bitcoin ‘bubble’ ” properly.
The American-Lebanese academic and hedge fund manager was tweeting to his more-than-200,000 followers hours before trading was due to go live last night in the first futures based on the virtual currency. He said that the opening of trading on the Chicago Board Options Exchange was unlikely to halt a rise that has led the cryptocurrency’s price to nearly treble in a month to about $15,000, briefly approaching $20,000. The rise in its value has surpassed “tulip mania” in the 17th century, leading some suggest that it is set to create the largest financial bubble ever.
Allowing bitcoin futures to trade on regulated exchanges is the first step to placing it in the financial mainstream and part of the recent rise in the price has been put down to expectations that big institutional investors will begin buying. Futures trading means that instead of buying “actual” bitcoins to profit from a rise in their value, an investor can purchase contracts that would profit from a drop in the market price. Such products are common in all other markets, such as currencies, shares and oil.
Mr Taleb warned that the development of a futures market may not stall bitcoin’s rise in price. “Futures that don’t have deliverables require a very, very deep market. Otherwise someone long in the future can push prices higher at settlement time with impunity,” he said.HT: MacroBusiness
The various Bitcoin markets are all over the place, once again, after the earlier CBOE crash:
| # | Source | Pair | Volume (24h) | Price | Volume (%) | Updated |
|---|---|---|---|---|---|---|
| 1 | Bithumb | BTC/KRW | $2,408,630,000 | $17,240.00 | 17.05% | Recently |
| 2 | Bitfinex | BTC/USD | $1,670,150,000 | $15,609.40 | 11.82% | Recently |
| 3 | GDAX | BTC/USD | $852,653,000 | $15,850.00 | 6.03% | Recently |
| 4 | Coinone | BTC/KRW | $718,358,000 | $17,259.30 | 5.08% | Recently |
| 5 | bitFlyer | BTC/JPY | $710,037,000 | $16,243.70 | 5.02% | Recently |
| 6 | Korbit | BTC/KRW | $339,849,000 | $17,255.60 | 2.41% | Recently |
| 7 | BTCC | BTC/USD | $285,576,000 | $16,899.00 | 2.02% | Recently |
| 8 | LakeBTC | BTC/USD | $280,780,000 | $15,751.90 | 1.99% | Recently |
| 9 | Bitstamp | BTC/USD | $278,226,000 | $15,280.00 | 1.97% | Recently |
| 10 | HitBTC | BCH/BTC | $278,180,000 | $15,718.30 | 1.97% | Recentl |
Here are CoinMarketCap and Yahoo Cryptocurrencies, also on the blogroll at right
And ZeroHedge:
CBOE Website Crashes As XBT Trading Begins, Bitcoin Price Surges
