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Ask HN: Why is no one arbitraging Bitcoin futures?
Bitcoin futures started trading last night and are currently significantly above the spot price. They’re priced at ~17,900 and ~16,700 on the major exchanges. An investor could borrow money, buy bitcoins, short the future and wait until january for a guaranteed return.
Issues I see with this arbitrage strategy:
1. Holding cost of bitcoin from now until January too high
2. Unable to execute at the future or spot price
Am I missing anything else?
- akhatri_aus 9y agoThey're priced higher because of the interest rate to borrow bitcoins. As you get to settlement date, the prices will converge. A lot of people are leveraging their buys so there is an interest rate to holding bitcoin, and it is quite high.
- SilasX 9y agoYeah, but that's a $1200 spread on a buy price of $16,700, or 7%/month which is (compounded) over 100%/year. Even with the risk premium that seems like it's too big not to have been arbitraged away.