Bitcoin Futures - What Use are They?

12 Pages Posted: 27 Jun 2018

See all articles by Shaen Corbet

Shaen Corbet

Dublin City University ; University of Waikato - Management School

Brian M. Lucey

Trinity Business School, Trinity College Dublin; Ho Chi Minh City University of Economics and Finance; Jiangxi University of Finance and Economics

Maurice Peat

The University of Sydney; Financial Research Network (FIRN)

Samuel Vigne

Trinity College (Dublin) - Trinity Business School

Date Written: June 16, 2018

Abstract

Early analysis of Bitcoin concluded that it did not meet the economic conditions to be classified as a currency. Since this analysis interest in bitcoin has increased substantially. We investigate whether the introduction of futures trading in bitcoin is able to resolve the issues that stopped bitcoin from being considered a currency. Our analysis shows that spot volatility has increased following the announcement of the futures contracts, the futures contracts are not an effective hedging instrument and that price discovery is driven by uninformed investors in the spot market. The conclusion that bitcoin is a speculative asset rather than a currency is not altered by the introduction of futures trading.

Keywords: Cryptocurrencies, Futures markets, Volatility, Speculative Assets, Currencies, information shares

JEL Classification: G13

Suggested Citation

Corbet, Shaen and Lucey, Brian M. and Peat, Maurice and Vigne, Samuel, Bitcoin Futures - What Use are They? (June 16, 2018). Available at SSRN: https://ssrn.com/abstract=3197634 or http://dx.doi.org/10.2139/ssrn.3197634

Shaen Corbet

Dublin City University ( email )

Dublin 9
Ireland

University of Waikato - Management School ( email )

Hamilton
New Zealand

Brian M. Lucey (Contact Author)

Trinity Business School, Trinity College Dublin ( email )

The Sutherland Centre, Level 6, Arts Building
Dublin 2
Ireland
+353 1 608 1552 (Phone)
+353 1 679 9503 (Fax)

Ho Chi Minh City University of Economics and Finance ( email )

59C Nguyen Dình Chieu
6th Ward, District 3
Ho Chi Minh City, Ho Chi Minh 70000
Vietnam

Jiangxi University of Finance and Economics ( email )

South Lushan Road
Nanchang, Jiangxi 330013
China

Maurice Peat

The University of Sydney ( email )

University of Sydney
Sydney, NSW 2006
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Samuel Vigne

Trinity College (Dublin) - Trinity Business School ( email )

Aras an Phiarsaigh
College Green
Dublin, Leinster D2
Ireland

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