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Managed futures / CTA managers slow to adapt Bitcoin futures, favor CME contract

Wednesday, January 17, 2018
Opalesque Industry Update - An international survey of CTAs - managed futures managers - has revealed limited enthusiasm for the new Bitcoin futures contracts offered, since December 2017, by CBOE and CME Group. The survey was conducted in early January by BarclayHedge, a leader in the field of alternative investment data analysis.

The survey, which involved managers from as far afield as Japan, Cyprus and Switzerland although predominantly based in the USA, indicated that some 73% of those questioned, did not "consider Bitcoin futures to be a valuable/useful addition to a diversified futures portfolio" and that over 80% had no plans to trade these contracts either now or within the next six months.

Among the reasons given for this negative viewpoint was the fact the contracts are too new to judge (31%); the margins are too high (30%) and/or that Bitcoins are too volatile (35%). That said, one third of managers surveyed agreed with the strident proposition that "Cryptocurrencies are a bad idea and should not be encouraged."

Among the 5% of managers who are already trading Bitcoins, and those who also chose to answer this question, there was a marked preference for the contracts offered by CME (25%) over those from CBOE (4%) despite the fact that current volume figures favour CBOE. These statistics may, however, reflect the fact that CME is an active supporter of CTAs and offers a significantly larger range of contracts familiar to most US and international managers.

"Looking ahead a year, it's clear the jury is still out," said Sol Waksman, founder and president of BarclayHedge. "While nearly 60% of respondents thought that Bitcoin futures would be inconsequential in 12 months' time, a good proportion (over 30%) thought these contracts would be high volume and very successful. In short, it's too early to tell."

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