Bitcoin futures launched on the Chicago Board Options Exchange (CBOE) on December 10, 2017 and started trading the day after. It’s also now started trading on the bigger Chicago Mercantile Exchange (CME) on December 18th, 2017.
SEE ALSO: All You Need To Know About Bitcoin
What does Bitcoin Futures mean?
Bitcoin futures are contract agreements that will be based on the price of Bitcoin and speculators can place a “bet” on what they believe the price of Bitcoin will be in the future. This contract helps investors to able to speculate on the price of Bitcoin without actually having to OWN Bitcoin.
There are 2 main consequences for the release of these futures:
- Since Bitcoin remains unregulated, Bitcoin futures can be traded on regulated exchanges. This is great news for those who are concerned about the risks related to the lack of regulation in the crypto industry – retail and institutional investors.
- In countries where trading Bitcoin is banned, Bitcoin futures allow investors to still be able to speculate on the price of Bitcoin.
Bitcoin Futures will contribute positively to the value of Bitcoin. How?
- It will be much easier to buy, sell or trade Bitcoins as Bitcoin Futures will allow more liquidity in the market.
- Institutional investors are positioning to start offering this contract to their clients as a viable investment option in a regulated market.
- People who were very skeptical of Bitcoin, due to lack of regulation, will now be more open to investing directly in Bitcoin or in Bitcoin Futures.
- Countries that have banned the trading of Bitcoins are likely to start looking at possible options to customize this contract or be a part of it.
Do you think Bitcoin will go down in value? Think again.
JP Morgan, whose CEO (Jamie Dimon) has tagged Bitcoin as a fraud in September 2017 is already one of the few institutional investors that are prepared to offer these contracts to their clients. It might interest you to know that JP Morgan is the 6th largest bank in the world and the largest in the US with about $2.5T under management.
Read the full explanation of Futures and its application to Bitcoin with CoinTelegraph
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