Swiss Bank Gives Investors A Way To Bet Against Bitcoin

Vontobel, the Swiss bank, is giving investors the ability to bet against cryptocurrency, gearing up to launch two mini futures to short bitcoin.

According to a news report in Reuters, citing a term sheet by Vontobel, if the value of bitcoin falls by 10 percent or more, the value of one of the two mini futures increases by close to 6 percent, while the other increases by nearly 10 percent.

The price of bitcoin has been volatile all year, dipping as much as 29 percent last week after hitting a record high of $7,888. Bitcoin started the year at around $1,000 and has been soaring higher all year. While some on Wall Street are skeptical of bitcoin – including the CEO of JPMorgan, Jamie Dimon, who called it a “fraud” and said that he would fire any traders who trade the cryptocurrency – it’s also growing in legitimacy.

Earlier this month, CME, the nation’s largest derivatives exchange, announced it would launch bitcoin futures in the last quarter of this year. The group’s backing signaled that the digital currency is on its way to becoming a legitimate mainstream alternative currency, which has sent its value surging. CME’s entry into the market not only boosts credibility, but also enables bigger investors – who are otherwise restricted from directly buying bitcoin – to ride the digital currency trend. Its entrance is also boosting interest in trading cryptocurrency.

Prompted by the announcement from CME, around 100,000 people signed up at Coinbase a day later. Alistair Milne, co-founder and chief investment officer of the Altana Digital Currency Fund, told CNBC that the huge jump was due to CME getting into the cryptocurrency market. As the biggest bitcoin exchange in the U.S., Coinbase – which has 11.9 million users – has become a very popular way to purchase bitcoin and other cryptocurrencies.


Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The May 2019 AML/KYC Tracker, provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.


To Top