We’re back: New products available on the Bitcoin Future BTC1

We’re back: New products available on the Bitcoin Future BTC1

24 March 2021

Bitcoin has been reaching new record highs. Vontobel has expanded its product range and can now offer Mini Futures on the Bitcoin Future BTC1 as underlying.

Link to all mini futures on  bitcoin future

Bitcoin’s success story

The first Bitcoin was mined on the 3rd January 2009 and was initially listed in October 2009 on the cryptocurrency exchanges for the price of 0,000764 US Dollar per Bitcoin. On 22nd May 2010 the first commercial transaction was executed using Bitcoin, where a programmer bought two pizzas with 10,000 Bitcoins for a price of 0,0025 US Dollars per Bitcoin.

Since then the Bitcoin price has risen dramatically. In February 2011 Bitcoin first reached equivalence to the US Dollar. In March 2017 the price of Bitcoin for the first time at the same spot price as for a troy ounce of gold and in March 2021 Bitcoin first reached a price of over 60,000 US Dollars.

Drivers of the recent price rally

Several factors have recently driven up Bitcoin the stock price. One price driver was the decision by the payment provider PayPal to accept the cryptocurrency as a means of payment. On the other hand, the many successful COVID-19 vaccines and general good mood in the stock market have given the cryptocurrency an additional tailwind. Some banks and hedge fund managers think that Bitcion has not yet reached its possible high.

Whether Bitcoin – unlike during the last record high of 2017 – can maintain this level remains to be seen. Regardless of which way the price will develop, interesting investment opportunities could arise for investors in the future.

Mini Futures on the Bitcoin Future BTC1

One way to participate in the future price development of this popular cryptocurrency is through the newly launched Vontobel Mini Futures on the Bitcoin Future, BTC1. Regardless of whether investors think that prices are going to rise or fall, with long and short Mini Futures on the Bitcoin Future investors can position themselves for both rising and falling price development – in line with their own market expectations.

The special feature of these new Mini Futures is the underlying – because it is not directly on the price of Bitcoin, but on the Bitcoin Future named BTC1 which traded on the US futures exchange CME Chicago Mercantile Exchange (www.cmegroup.com), which is calculated and published by the CME in US Dollars.

Mini Futures have a stop loss level. If the price of the underlying reaches or falls below (for a Long Mini Future) this level during the observation period (a stop loss event is observed), then the Mini Future expire immediately and are investors are repaid a potential redemption price. Conversely, in the case of Short Mini Futures, reaching or exceeding the stop-loss level constitutes the same stop-loss event. Further information can be found in the final terms, the base prospectus and the base key information document for the respective product.

Investment via Mini Futures can offer certain advantages

Whether they are Long or Short products, the instruments offer certain advantages instead of investing directly in the cryptocurrency. One of these is that they can be traded on the exchange can be stored in a securities account. There is therefore no need for wallets for the cryptocurrency. Under normal market conditions, buying and selling prices are provided by the market maker for which investors can trade the products. On the other hand, it is also possible to gain exposure to falling prices. This is possible with the Short Mini Future. In any case, the investor bears always the issuer risk (the risk that the issuer of the instrument cannot fulfil its obligations related to the product). Due to the leverage effect in the instrument, there is also an increased risk of total loss of invested capital for investors.  

Link to all mini futures on  bitcoin future

Important legal information

Legal notice

This information is in the sole responsibility of the guest author and does not necessarily represent the opinion of Bank Vontobel Europe AG or any other company of the Vontobel Group. The further development of the index or a company as well as its share price depends on a large number of company-, group- and sector-specific as well as economic factors. When forming his investment decision, each investor must take into account the risk of price losses. Please note that investing in these products will not generate ongoing income.

The products are not capitalprotected, in the worst case a total loss of the invested capital is possible. In the event of insolvency of the issuer and the guarantor, the investor bears the risk of a total loss of his investment. In any case, investors should note that past performance and / or analysts' opinions are no adequate indicator of future performance. The performance of the underlyings depends on a variety of economic, entrepreneurial and political factors that should be taken into account in the formation of a market expectation.

05/10/2022 16:26:09


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