WASHINGTON, Sept. 13 (Seal News) — Latest data of Bitcoin futures show that speculative activities over the iconic cryptocurrency weakened, 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 951 Bitcoin futures contracts. Meanwhile, the total amount of the futures contracts held by speculators decreased.
Commercial traders, commonly treated as hedgers, 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 saw moderate movements near 10,000 U.S. dollars, while its whole market value remained steady at about 180 billion dollars, according to trading website Coinbase.
The Bitcoin futures, traded at the 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.