Bitcoin Bears Are Excited About Futures

Bitcoin futures start trading next week, and people who have spent the last few years convinced that bitcoin is a dumb bubble are very excited to finally be able to put their money where their mouths are and start shorting bitcoin. But is this right?

I mean, it's not wrong. Bitcoin futures do make it easier to go short: Borrowing bitcoins to short them physically is difficult and expensive; shorting them through futures should be straightforward. Bitcoin futures also make it easier to go long: Buying bitcoins to own them physically is rather annoying for institutional investors; if you own a lot of bitcoins you have to worry about getting them hacked or stolen, or you have to store them in cold storage (slips of paper, safes), which makes them inconvenient as trading assets. It is strictly true that bitcoin futures will do more to make shorts easier than they will to make longs easier -- just because being long bitcoin, now, is easier than being short -- but I am not sure that that will be net bearish. If there are 100 people lining up to go long once it gets 10 percent easier, and 10 people lining up to go short once it gets 50 percent easier, then making it a little easier to go long and a lot easier to go short may just lead to more longs.