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Bitcoin sees stronger speculative activities as price moves higher

2019-09-07 10:33

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WASHINGTON, Sept. 6 (Xinhua) -- Speculative activities around Bitcoin futures strengthened after the price of the iconic cryptocurrency increased significantly, according to a report from U.S. Commodity Futures Trading Commission on Friday.

For the week ending Tuesday, non-commercial investors, commonly treated as market speculators, held a net short position of 1,120 Bitcoin futures contracts. Meanwhile, the total amount of the futures contracts held by speculators increased.

Besides, commercial traders, commonly treated as hedgers, also held a net short position of 26 contracts.

Speculators and hedgers are different types of investors. Speculators try to make a profit from the assets' price volatility, whereas hedgers attempt to reduce or "hedge" the amount of risk created by price volatility during the holding period of the assets.

When investors "short" some kind of financial assets like currencies, commodities, options or futures, they hold a bearish view on the asset and believe there will be a drop in the price.

This week, the price of the cryptocurrency returned to over 10,000 U.S. dollars, pushing its whole market value to over 180 billion dollars, according to trading website Coinbase.

The Bitcoin futures, traded at Chicago Mercantile Exchange in the United States, are derivative financial contracts that obligate the parties to transact an underlying asset at a predetermined future date and price. The underlying asset of each Bitcoin futures contract includes five Bitcoins.

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