Wall Street can't wait to short bitcoin
- 7 years ago
CHICAGO — With Bitcoin up over 1,500 percent this year, Wall Street traders are itching to get in on the action. But not to buy Bit, they want to short it.
The largest U.S. options exchange, CBOE Holdings, announced that it's teaming up with the Winklevoss twins' Gemini Trust Co. to create Bitcoin derivatives.
CBOE will use Gemini's bitcoin data to create futures on bitcoin. Essentially, this will allow a lot more investors to bet on the movement of Bitcoin without actually having to own any of the underlying asset — Bitcoin.
This is where it gets interesting. Short selling Bitcoin can be way riskier than owning the asset yourself. When you own the asset, the most you can lose is your initial investment.
When you short sell an asset (Bitcoin), your losses could be infinite, limited only by how high the price goes.
The largest U.S. options exchange, CBOE Holdings, announced that it's teaming up with the Winklevoss twins' Gemini Trust Co. to create Bitcoin derivatives.
CBOE will use Gemini's bitcoin data to create futures on bitcoin. Essentially, this will allow a lot more investors to bet on the movement of Bitcoin without actually having to own any of the underlying asset — Bitcoin.
This is where it gets interesting. Short selling Bitcoin can be way riskier than owning the asset yourself. When you own the asset, the most you can lose is your initial investment.
When you short sell an asset (Bitcoin), your losses could be infinite, limited only by how high the price goes.