World’s first bitcoin short notes allow bears to ride big swings

Bitcoin bears now have another way to bet on price falls.

Swiss structured products houses Vontobel AG and Leonteq Securities AG started separate products on Friday that allow investors to profit if the price of bitcoin tumbles. Not that it has tumbled much lately. Bitcoin is trading at a record high and has soared more than 700% this year.
But the new certificates could usher in more two-way price movement in what has largely been a one-way market so far. Intraday price swings of 10% or more are not uncommon in bitcoin trading.

The ability to go long and short paves the way for investors to “take advantage of bitcoin’s significant price swings,” said Garrick Hileman, research fellow at the University of Cambridge. “The lopsided cryptocurrency investment playing field, historically slanted in favor of long positions, is about to be leveled.”

The certificates, which will be listed on SIX Exchange AG on Friday, come as the cryptocurrency starts to gain mainstream acceptance as a financial instrument after CME Group Inc., the world’s biggest exchange, said it would start bitcoin futures next month
The initial feedback has been extremely positive,” said Manuel Dürr, head of public solutions at Leonteq. “Clients do very much appreciate the possibility of choosing between a long or a short investment in bitcoin.”

Leonteq’s product has a two-month maturity, while Vontobel’s is longer, but in both versions investors can exit early like regular exchange-traded instruments