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Sol Waksman

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Four fifths of CTAs have no plans to trade Bitcoin futures

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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 per cent of those questioned, did not “consider Bitcoin futures to be a valuable/useful addition to a diversified futures portfolio” and that over 80 per cent 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 per cent); the margins are too high (30 per cent) and/or that Bitcoins are too volatile (35 per cent). 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 per cent 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 per cent) over those from CBOE (4 per cent) 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,” says Sol Waksman (pictured), founder and president of BarclayHedge. “While nearly 60 per cent of respondents thought that Bitcoin futures would be inconsequential in 12 months’ time, a good proportion (over 30 per cent) thought these contracts would be high volume and very successful. In short, it’s too early to tell.”
 

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