Bitcoin climbs as futures debut fails to incite attack by shorts

The arrival of a new futures contract that makes it easier to place short bets on bitcoin wasn’t enough to undercut the cryptocurrency’s march toward $20,000.

The digital token, up about 20-fold this year, added another 4.8 per cent from its New York close on Friday to $18,379 as of 9.24 local time, according to prices on Bloomberg. That was in line with its new contract for January delivery, which was at $18,650. Bitcoin touched a record $19,511 just minutes before CME Group began offering futures on Sunday evening in a move that broadens the market for institutional traders and makes it easier to sell the cryptocurrency short.

Still, impediments remain to betting on a dive. The Chicago-based futures exchange, the world’s biggest, required a 47 per cent initial margin, or almost $50,000, for opening trades on a five-bitcoin future. Settlement terms are spurring some participants to question whether futures will move fully in line with the underlying asset.

“In theory, it does open it up to shorting opportunities, but as always, the devil is in the detail,” said Jeremy Goldwyn, a managing director at Hong Kong-based commodities and financial futures brokerage Bands Financial.