Both are margin products, which will allow “investors” to, ahem, lever up. After all, a futures contract is indeed a contract-one must sell before the expiration date or be prepared to take physical delivery. Move over sugar and corn futures, here comes crypto. Back in my corn futures trading days, my wife joked (and feared) that I’d get hit by a bus and, one month later, trucks of corn would show up at our door. Brokerages will typically force us (Recommended Internet page) to liquidate before we take delivery.

This “Fed pivot” happened in the fall of 2022, during the UK gilt (“gilt” is Brit-speak for bonds) crisis. Uh oh. Central banks sniffed a financial crisis. Central banks sniffed a financial crisis. Didn’t care for the smell. Remember that? UK (go right here) pension funds were levered up on “safe” gilts, which began to implode. They reversed course on their monetary tightening and loosened up. Didn’t care for the smell. These days, investors are more likely to buy bitcoin as a hedge against money printing. Back in the day, this would have been reflected in higher gold prices.

In the spirit of “corn deliveries” CBOE also has products in the works that will include physically delivered products. There will likely be long-term consequences, but this isn’t our concern as short-term traders! This money printing is being reflected in higher crypto and gold prices. As we discussed earlier this month, our Federal Reserve is sneakily pumping monetary liquidity into the financial system. Crypto being digital, we’re talking about physical tokens and certificates and such. Bitcoin is expensive but backdoor play CBOE remains cheap.

I prefer backdoor plays. They were the entrepreneurs who sold the “picks and shovels” as well as booze, “entertainment” and lodging to the hapless speculators. But the guys who made the real money didn’t actually mine anything. The phrase “pick n’ shovel” dates back to the gold rush of the 1840s, when hordes flocked to California to get rich mining for the metal. We’re not peddling booze. Instead, we’re looking for the stocks that are benefiting from the bitcoin gold rush. The old “pick. Shovel” providers.