If cash-and-carry arbitrage bounds exist, the key issue is the costs (or benefits) of holding spot...
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If cash-and-carry arbitrage bounds exist, the key issue is the costs (or benefits) of holding spot positions in BTC. Consider first the long side. If you buy one BTC (and sell the futures contract) and hold it to the futures settlement date, how exactly do you store it? Can you lend it out (invest) and earn interest on it? If so, how does it work? That is, is there a way to deliver to someone else your BTC on the blockchain? If so, is the loan secured by any collateral? Under what legal jurisdiction could you attempt to enforce the lending contract? What interest rate can you earn in BTC? If cash-and-carry arbitrage bounds exist, the key issue is the costs (or benefits) of holding spot positions in BTC. Consider first the long side. If you buy one BTC (and sell the futures contract) and hold it to the futures settlement date, how exactly do you store it? Can you lend it out (invest) and earn interest on it? If so, how does it work? That is, is there a way to deliver to someone else your BTC on the blockchain? If so, is the loan secured by any collateral? Under what legal jurisdiction could you attempt to enforce the lending contract? What interest rate can you earn in BTC?
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If you buy one BTC and hold it to the futures settlement date you would need to consider how to store it securely BTC is a digital asset and it is typ... View the full answer
Related Book For
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
Posted Date:
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