‘No way to properly’ short bitcoin bubble, expert warns

Bitcoin’s value rose to more than $17,000 before dipping. (Reuters)
Updated 12 December 2017
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‘No way to properly’ short bitcoin bubble, expert warns

LONDON: Nassim Nicholas Taleb, an academic and expert on the derivatives market, has tweeted a warning about using future contracts to hedge the rising price of bitcoin.
In a Tweet dated Dec. 9, he said: “… there is NO way to properly short the bitcoin ‘bubble’.”
His tweet went out just before the virtual currency began trading on the Chicago Board Options Exchange (CBOE) on Sunday night, a move which will allow investors to bet on the direction of bitcoin ­prices.
“Any strategy that doesn’t entail options is nonergodic (subjected to blowup). Just as one couldn’t rule out 5K, then 10K, one can’t rule out 100K,” Taleb said within the same tweet. The bitcoin securities will track the price of virtual currency as quoted on Gemini, a large bitcoin exchange.
Taleb has around 228,000 followers, and is known for predicting Black Swan events, including forecasting the 2008 crisis and the outcome of the 2016 US presidential ­election.
In a later tweet, he wrote: “Note that bitcoin has a limited number of natural sellers. The entire concept is very concave supply (it costs more and more to extract). The number of producers shrinks with time.”
Following the launch on the CBOE, bitcoin is expected to be listed on the Chicago Mercantile Exchange by the end of the month.
The listing of bitcoin on exchanges is seen by some as an attempt to legitimize the cryptocurrency, as well as make it easier for people active in conventional investment banking to buy the asset.
In the run-up to the launch, bitcoin’s value rose to more than $17,000 before dipping.
The opening price for the bitcoin futures was $15,000, according the CBOE statement. Over the past five years, the total value of all outstanding bitcoin has grown from less than $1 billion to more than $262 billion as of Dec. 8, according to the statement.
The total value of all cryptocurrency tokens stands at approximately $423.7 billion, the statement said.
Bitcoin has gained in popularity in recent years as a currency that is not tied to a bank or government, enabling people to spend money anonymously.


Mideast carriers to benefit from lower oil price

Updated 7 min 2 sec ago
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Mideast carriers to benefit from lower oil price

  • IATA expects Mideast airlines to make profits of $800m in 2019
  • Capacity growth expected to slow next year

LONDON: Lower oil prices are expected to boost profits at Middle East airlines in 2019 as a decade of double-digit growth starts to slow.
The 2019 industry outlook from the International Air Transport Association (IATA) is based on an anticipated average oil price of $65 per barrel — lower than the $73 experienced in 2018.
Middle East airlines are expected to report an $800 million net profit in 2019, compared to $600 million in 2018, IATA said on Wednesday.
“We had expected that rising costs would weaken profitability in 2019. But the sharp fall in oil prices and solid GDP growth projections have provided a buffer,” said IATA CEO Alexandre de Juniac. “So we are cautiously optimistic that the run of solid value creation for investors will continue for at least another year.”
Lower oil prices are welcome relief for airlines whose aviation fuel bill can account for a third of overall costs.
IATA said jet fuel prices are expected to average $81.30 per barrel in 2019, lower than the $87.60 per barrel average for 2018.
Middle East carriers have been hurt by a slowdown in regional spending, conflict and overcapacity.
That is expected to lead to a slowdown in capacity growth — projected at 4.1 percent in 2019 compared to 4.7 percent in 2018.