Switzerland Introduces New Bitcoin Futures Products

Switzerland’s major financial institutions are making it easier to short bitcoin, as one of Europe’s most dynamic economies continues to embrace all things cryptocurrency.

Bitcoin Futures Come to Switzerland

Swiss asset manager Vontobel has announced it will launch new futures contracts designed to short the world’s most active cryptocurrency. The first two mini futures to short BTC will hit the markets on Friday, giving investors the ability to bet against the value of bitcoin or to hedge positions in the crypto asset.

Vontobel has also published termsheets explaining how the mini futures contracts will fluctuate vis-a-vis bitcoin. According to the information provided, the more conservative mini futures contract will drop nearly 6% should bitcoin lose 10% of this value. The other futures contract will gain nearly 10% during the same process. This setup provides the advantage of limited loss potential when compared with traditional futures contracts.

As investors are no doubt aware, fluctuations of this nature are not uncommon for bitcoin. The cryptocurrency tanked over 20% last week as Bitcoin Cash (BCH) spiked to new all-time highs. Bitcoin has since reversed all of its declines en route to fresh records north of $8,000.

Bitcoin’s recent run of gains has catapulted the crypto universe to all-time highs in terms of market cap. At last check, the total value of cryptos in existence was north of $225 billion. Bitcoin owns roughly 55% of that market.

BTC has gained 1,000% over the past 12 months. Prices are up more than 15% (roughly $1,000) over the past five days.

Eric Blattmann, a senior executive at Vontobel, issued the following statement:

“We have seen big demand for our long tracker certificate from investors interested in playing the upside potential of bitcoin and now they have also the possibility to hedge their position or go short.”

Vontobel wasn’t the only Swiss entity to announce a bitcoin futures contract this week. Leonteq Securities AG will also offer a product allowing investors to profit from price declines of bitcoin. That product will have a two-month maturity, according to reports gathered by Bloomberg Technology.

Switzerland: Crypto Heaven?

When it comes to cryptocurrency regulation, Switzerland is one of the most progressive nations in the world. This favorable attitude is best reflected in Crypto Valley, a region in Zug that houses some of the world’s leading blockchain companies.

Crypto Valley is the culmination of government and private efforts to remodel Switzerland as the blockchain capital of Europe. The municipality of Zug has already succeeded in landing some of the world’s biggest blockchain companies, including Ethereum, Bitcoin, Suisse, Xap, Tezos, ShapeShift and many others.

Many bitcoin enthusiasts believe that the actions at major financial institutions will lead to greater adoption of cryptocurrency. That’s why investors rejoiced when CME Group and CBOE Global Markets both announced plans to introduce futures contracts on Wall Street. These futures products are expected to be rolled out at the end of 2017 and early 2018.

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi