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Interactive Brokers is now letting its users go short
on bitcoin in the newly launched futures market.
It’ll give investors a vehicle by which they can bet
against the future price of the coin, which is up more than
1,600% this year.
One of the largest brokerages is letting its clients short
giving folks bearish on the coin a way to bet against it.
A spokeswoman for the firm told Bloomberg the move was “in
response to client demand.”
The company has allowed users to invest in the new market via
long positions, requiring a larger down payment for trades than
the standard required by Cboe. It is one of the largest players
in the market, so far.
“Interactive Brokers has a few requirements for shorting bitcoin
futures: the spread must be one-to-one, and the short leg must
have the earlier expiry date so that once it expires the
surviving leg will be long,” Bloomberg reported.
Prior to the launch of futures, the
firm’s chairman asked the CFTC to prevent exchanges from
launching such a market.
Most big Wall Street banks have been more cautious, showing no
indication of entering the market in the short term. JPMorgan and
Citigroup, two of the largest futures brokers, are not clearing
trades for its clients.
A person familiar with JPMorgan’s operations told Business
Insider the firm didn’t want to be in the market on day one,
citing concerns about liquidity and too much risk being placed on
clearing houses if the bitcoin market blows up. When there’s
enough volumes, the bank might consider dipping its toes into the
The bank’s CEO
Jamie Dimon notable called bitcoin “a fraud” in September.
Then, the cryptocurrency traded just above $4,000 a coin.
Cryptocurrency hype has reached peak levels, with coins across
the market hitting new highs on a daily basis and cryptocurrency
immense pressure to meet spiking demand from more and more
users. Bitcoin broke through $17,500 on Tuesday and the
entire market for digital coins was close to $500