Hedge Funds May Begin Betting Against Bitcoin

Bitcoin

This past month major Bitcoin future contracts have been approved on two large exchanges and as a result, Bitcoin’s price has reached all-time records. According to a few cryptocurrency analysts, this addition may produce a platform for a large pending ‘short’ market. As Bitcoin has high volatility and the potential to fall, it could lead to a massive number of certain investors taking those ‘short’ positions.

In a recent article published by Bloomberg, hedge funds may force some massive pressure and begin to take advantage of what they see as potentially the “greatest shorting opportunity in history.”

Lou Kern, a Flight VC partner and long-time cryptocurrency investor stated:

According to cryptocurrency investor Lou Kerner, a partner at Flight VC:

“[It may be] one of the greatest shorting opportunities ever. You have a lot of zealotry, and a lot of people, including me, who think it’s the greatest thing to ever happen in the history of mankind. You have a lot of people who think it’s a bubble and a Ponzi scheme. It turns out both of them can’t be right.”

The addition of Bitcoin futures into the market will have major impacts into bringing mainstream investment money into the cryptocurrency space, where it’s long or short. Regardless of the price, Bitcoin’s overall ecosystem should begin to stabilize considerably with the influx of investors.

If a large amount of money were to move into the short position and Bitcoin’s price was to rise, the results could become the largest ‘short squeeze’ of all-time. So what’s a ‘short squeeze’, you ask? This squeeze takes place when a densely shorted stock rises in price, which then forces short contract holders to “squeeze” out of their short positions at a loss and thus driving the price father up with heightened pressure.

Featured Image: twitter

Chelsea Roh is a freelance content writer living in Vancouver, BC. Her current focus is cryptocurrency, financial analysis and blockchain technology. In addition to content writing, she is an experienced Social Media Manager/Strategist. Before moving to Canada, she spent 10+ years marketing and working hands on in the medical practice industry.