By Rob Urban and Sonali Basak A big short is building. The planned introduction of contracts at CME Group, Cboe Global Markets and Nasdaq will make it much easier to bet on a decline. Hedge funds, which have largely stayed on the sidelines, are waiting for the Chicago Mercantile Exchange's futures market to open for a fresh opportunity to bet against the cryptocurrency, according to more than a half dozen people trading the assets. 'The futures reduce the frictions of going short more than they do of going long, so it's probably net bearish,' said Craig Pirrong, a business professor at the University of Houston. 'Having this instrument that makes it easier to short might keep the bitcoin price a little closer to reality.' Bitcoin has gained millions of percentage points since it started trading in 2010. An investment of $US1 at the beginning would now be valued at more than $US1.4 million ($1.84 million). A dollar invested in the S&P 500 stock index for the same period would now be worth less than $US4 including reinvested dividends. Bitcoin has been especially volatile recently, plunging nearly 20 per cent in less than 90 minutes on November 29, to $US9009 after briefly topping $US11,000. The price has since recovered, and was trading at more than $US11,332.01 at 11.42am in New York on Monday, a 3.9 per cent jump since Friday. Cboe said on Monday that it will start trading bitcoin futures on December 10 and CME's contracts are set to debut on December 18. Nasdaq is planning to offer futures next year, according to a person familiar with the matter. Cantor Fitzgerald's Cantor Exchange is creating a bitcoin derivative, and startup LedgerX already offers options. Ari Paul, co-founder of hedge fund BlockTower Capital and former portfolio manager at the University of Chicago endowment, said people are mistaken if they think the famously volatile cryptocurrency is a clear-cut short. 'While some traders are eager to be able to short bitcoin and will do so when the futures are launched, there is a far greater amount of money eagerly awaiting the futures as a vehicle to go long,' Paul said. 'Small potatoes' There are limited ways to short bitcoin today, said Michael Moro, chief executive officer of Genesis Global Trading. The cryptocurrency trading platform has lent about $US20 million to investors to take bearish positions, which were mostly to hedge existing bets, he said. Companies like GDAX, BitMEX and Bitfinex allow investors to buy assets on margin for short periods. 'With the existing exchanges, no one can get in and short $US1 million,' Moro said. 'It's really small potatoes on what you can do today. The CME guys open up a new frontier.' Bitcoin's 90 per cent surge this year has drawn a range of reactions from Wall Street. JPMorgan Chase & Co. CEO Jamie Dimon famously called the cryptocurrency 'a fraud', while bulls including Thomas Lee at Fundstrat Global Advisors and hedge fund manager have predicted more rises. The ability to short the currency is 'an important part of the ecosystem', said Novogratz, who recently began to raise $US500 million to invest in cryptocurrencies. Novogratz, a bitcoin believer in the long term, has said short trades can be risky. 'There is a lot of froth,' he said at a cryptocurrency conference last week in New York. 'This is going to be the biggest bubble of our lifetimes.' ![]() Bitcoin cloud mining uses the. Not clear as to the difference of the Monero contract vs others. We have been buying mining contracts with Genesis mining several. Genesis Mining is the largest and most trusted cloud Bitcoin mining provider in the world. We are dedicated to transparency, efficiency, and maximizing your profits. Short sellers essentially borrow a security, betting that the price will fall and they can pocket the difference when they return the holding. The strategy carries risks. Borrowing bitcoin can be difficult, and price swings sudden, said Moro of Genesis. 'The concept is that this is such a volatile market that it's going to scare a lot of investors away,' said Kerner of Flight VC.
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