Correlations between traditional finance and cryptocurrency are not hard to find these days. Investors want exposure to Bitcoin but without most of the risks. Speculation on the Bitcoin price is their main objective first and foremost. New investment vehicles on Switzerland’s Six Exchange AG may provide the solution people have been asking for. It allows investors to profit if the Bitcoin price dips while limiting loss risk at the same time.
Betting on the Bitcoin price is always a major gamble. Some people may call it “investing”, but it is gambling of the purest kind. Enough shorts against Bitcoin can easily trigger a price decrease. However, there is always a certain risk associated with this process, as cryptocurrency markets are unpredictable. Two Swiss companies have come together to create a new mainstream solution. Their product can be traded on Six Exchange AG. It provides investors with “bearish” opportunities. Rest assured there will be some great interest in this product moving forward.
A New Mainstream Speculative Bitcoin Price Vehicle
More specifically, the demand for Bitcoin certificates is increasing. This is especially true in Switzerland, for some unknown reason. While speculation on price increases is common, the market can swing the other way as well. Giving investors an option to hedge their positions or go short in a mainstream fashion is pretty interesting. Vontobel AG claims this is the best decision given current market demand. An interesting approach, although the success remains to be determined.
Providing this opportunity to regular investors is pretty significant. It will introduce more people to the world’s leading cryptocurrency as well. If all of these people go short, the momentum may turn against Bitcoin. It may not impact the price right away, though. Given the price gains during 2017, opening a short seems logical. Then again, the Bitcoin price set a new all-time high earlier this week. A very unpredictable market to take advantage of, that much is certain.
The most interesting aspect is the limited loss potential. This new vehicle has a multi-month maturity. At the same time, investors can exit early like any other instruments. It remains to be seen how much interest there will is in this new product, though. Initial feedback seems to be positive, which is to be expected. We see more crossovers between traditional finance and Bitcoin these days. That can only be considered to be a positive trend, all things considered.
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