Former International Monetary Fund Economist Mark Dow Closes Year-Old Bitcoin (BTC) Short
As many of our regular readers may remember, exactly one-year back to this day, Bitcoin (BTC) was trading for a mammoth sum of $19,500 per coin. However, since then, the landscape of the crypto market has changed quite substantially (with BTC now trading at just over $3,500).
With this in mind, it is worth noting that shortly after BTC scaled up to its ATH, former International Monetary Fund economist Mark Dow made an unpopular bet which claimed that the premier cryptocoin would not be able to sustain its growth much longer. As a result of this, he entered into a “short position” owing to which, he is now set to make some big bucks (since his position finally closes today).
— Dow (@mark_dow) December 18, 2018
When asked about how he managed to have such amazing foresight into the matter, Dow said that a large part of his decision was based on the ‘launch of Bitcoin futures’ earlier this year.
More on the Matter
Earlier in January, Dow penned a guide of sorts for people looking to short Bitcoin (right around the time he had opened his position). In the guide he was quoted as saying:
“First, bitcoin is volatile. It’s annualized volatility is over 100%, implying daily moves up or down of over 6%. Second, bitcoin exchanges are open 24/7, but bitcoin futures follow regular Globex hours. Third, the exchanges have integrity risk (e.g. Mt Gox) and the futures have 20% collars. These last two factors increase gap/discontinuous pricing risk for those who trade the futures, even though I suspect these factors represent more risk for long positions in bitcoin futures than for short ones.”
In addition to all this, Dow also told a respected media outlet recently that he has already raked in substantial profits twice earlier this year on his short position but now he has decided to close the position for good. Also worth mentioning is that despite Dow raking in such heavy profits from his BTC holdings, he has continued to refer to the asset as a “faith based currency”.
What Does the Future Hold For Bitcoin?
When asked about the future of Bitcoin, Dow refrained from making any further predictions. Rather, he chose to simply say:
“I’m done. I don’t want to try to squeeze more out of the lemon.”
Similarly, in a recent interview with Bloomberg, perennial crypto bull Mike Novogratz was quoted as saying that the ‘demand pressure’ currently affecting Bitcoin was finally “over.”
Despite many analysts claiming that the future of Bitcoin looks positive, it is worth noting that until more money starts flowing into this nascent domain, any predictions in relation to the currency should be taken with a pinch of salt.