by Jospeh Young
Economists, bank executives, and a small portion of investors in the traditional finance industry have publicly condemned bitcoin, falsely describing the cryptocurrency as a fraud, a money laundering tool, and a bubble.
However, as demonstrated in the price trend of bitcoin and the volumes on the bitcoin futures exchanges on the Chicago Board Options Exchange (Cboe), CME Group, and LedgerX, three trading platforms regulated by the US Commodities and Futures Trading Commission (CFTC), skeptics are not putting their money where their mouth is and shorting bitcoin.
“So many bitcoin skeptics yet so few bitcoin future shorts. As if people are afraid to put money where their mouth is,” Zerohedge wrote.
On Cboe and CME, bitcoin contracts are often being traded at the same rate as the global average bitcoin price or higher.
As CCN previously reported, the Winklevoss twins, the first confirmed bitcoin billionaires with the exception of bitcoin creator Satoshi Nakamoto, challenged skeptics and critics including JPMorgan CEO Jamie Dimon to bet against bitcoin by shorting the cryptocurrency if they are confident that the value of bitcoin will decline in the long-term.
“We’ve been working really hard to give Jamie Dimon an opportunity to short bitcoin, and anybody who says that you know, it’s a fraud or a bubble, you can go now [and] put your money where your mouth is, and bet against it.
We encourage Jamie Dimon, we encourage him to personally bet against it, bitcoin, take J.P. Morgan’s balance sheet, bet against bitcoin. We’ll see what happens.”
By “opportunity,” the Winklevoss twins referred to the CME bitcoin futures exchange, which was launched in partnership with US-based regulated cryptocurrency trading platform Gemini, founded by the Winklevoss twins.
Upon the launch of CME Group’s bitcoin futures exchange, Gemini and the Winklevoss twins vowed to continue building a robust infrastructure to address the growing demand from investors in the traditional finance sector for bitcoin. That also meant that a platform and infrastructure for bitcoin critics would be introduced, so that investors that truly believe bitcoin is a fraud or a scam can bet against it.
So far, investors have not bet against bitcoin and placed a substantially large number of short contracts against the cryptocurrency. As of January 2018, investors and critics have failed to express their confidence on the downward trend of bitcoin and acquire short positions in bitcoin.
Such a behavior from investors and critics demonstrates a simple mindset: delusion. Critics do not want bitcoin to evolve into a major asset class, even if it already has because it defeats the fundamentals and philosophies conventional economists have built for many decades.
But, critics are not confident that bitcoin will fall in value, because of the growing liquidity of the cryptocurrency, exponentially increasing adoption of bitcoin, and the global market’s acknowledgment of bitcoin as a premier store of value, medium of exchange, and digital currency.
What Happens Next?
The general public and consumers have started to understand that bitcoin has become a major asset class that cannot be dismissed by major financial institutions. This week, JPMorgan CEO Jamie Dimon publicly stated that he regrets calling bitcoin a fraud, and admitted that he was wrong about it.
Bitcoin will continue to evolve into a premier asset and digital currency, despite the baseless criticism from conventional economists.