CME futures. Everyone is abuzz in the Bitcoin community as this is yet another sign of Bitcoin's mainstream acceptance. Or is it?

Days ago, I criticized the hypocrisy of Jamie Dimon with JPMorgan as he announced that they would be looking into offering their clients CME futures with Bitcoin. This is the man who declared Bitcoin a fraud mere weeks earlier, and he was now interested in getting clients (and perhaps himself?) involved with investments in it. It does seem pretty sketchy. A man who expresses nothing but derision for a fraudulent product that will fail, now promoting, even embracing the product?

After more discussion, however, this line of thinking, I'll admit, is flawed. The whole point of futures is to be able to bet on the growth or demise of a given commodity. The ability to short on cryptocurrency, up until this point, has been pretty limited. This opens up new possibilities for those who doubt the long, or for that matter, short term success of Bitcoin.

So what exactly is "short selling"?

From http://www.swing-trade-stocks.com/shorting-stocks.html ,

"When you short a stock, you will borrow the shares from your broker, wait until the price drops, buy the shares, then return the borrowed shares back and you will profit the difference. Here is an example:

Microsoft is trading at $30.00 a share. You think that the price is going to go down so you short 200 shares ($6000.00). You are borrowing shares of Microsoft from your broker at this high price of $30.00. Just as you expected Microsoft goes down to $20.00 a share.

You decide that you are ready to cash in, so you buy (called covering) the shares at $20.00. Your broker will now return the borrowed shares to the owner and you will profit the difference. Since you shorted at $30.00 and covered at $20.00 your profit is $10.00 a share on 200 shares - $2000.00."

When you think a little more carefully about this, it makes a lot of sense. If Dimon truly doubts the value of Bitcoin, and really believes it is in a massive bubble, it behooves him and his clients to short-sell it and make a fortune off everyone else's losses. This is consistent with JPMorgan's ethos, and frankly, far more consistent than expressing warning to protect the average would-be crypto-investor.

So maybe Dimon isn't being hypocritical at all. The question is, will we ever know whether or not he actually shorts Bitcoin?

sources:

news.bitcoin.com/wp-content/uploads/2017/05/cme.jpg

http://www.swing-trade-stocks.com/shorting-stocks.html