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Bitcoin Futures

Alert: Wall Street is behind maximum bitcoin futures trading

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According to data, the Chicago Mercantile Exchange Bitcoin futures suggest that the Wall Street has a noteworthy part in the total Bitcoin futures market.

According to data, the Chicago Mercantile Exchange or CME Bitcoin futures suggest that the Wall Street has a noteworthy part in the total Bitcoin futures market as the volume of bitcoin futures traded on  4th April is around $563 million in comparison to the top ten cryptocurrency exchanges which traded around $685 million.

 

CME bitcoin futures experiencing enormous volumes:

The CME bitcoin futures have been experiencing a massive amount of trading volumes since the Chicago Board Options Exchange or CBOE has decided to delist bitcoin futures from its exchange.

 

The participation of large stock exchanges in the cryptocurrency derivatives is surely going to be beneficial for the overall cryptocurrency industry in terms of liquidity and regulations point of view.

 

CME bitcoin futures trading volume

CME bitcoin futures trading volume

 

According to research by Messari Crypto, a crypto research firm, CME experienced around $563 million in bitcoin futures trading volume on 4th April 2019 which is massive.

 

Wall Street playing a major role in the bitcoin market:

According to Mati Greenspan, cryptocurrency analyst at eToro exchange platform, although the contracts traded on Wall Street are on paper and not settled physically with BTC, still they are a major role in the overall market now.

 

CME launching Micro E-mini futures contracts:

The Chicago Mercantile Exchange is also planning to launch Micro E-mini futures contracts after achieving success in terms of bitcoin futures. According to recent reports, the Micro E-mini futures contracts shall be launched as soon as May 2019 and major markets such as S&P 500, NASDAQ 100, Dow and Russell 2000 shall be ready for trading.

 

The Micro E-mini futures contracts shall be a 1/10th size of the indexes they represent which shall enable the user in controlling larger amount futures contracts at similar pricing. The users shall also be able to exit at more than one profiting targets allowing them to scale out.

 

Even after the CBOE delisted the bitcoin futures from its exchange, the overall BTC futures market seems to be achieving heights in terms of adoption and growth.

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Alert: CBOE Bitcoin Futures Put on Hold

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CBOE has made an announcement that it is not going to list Bitcoin Futures in March this year. The previous contracts listed will still remain listed.

CBOE or the Chicago Board Options Exchange famous in the cryptocurrency space for the listing of bitcoin futures has now made an announcement that it is not going to list Bitcoin Futures in March this year. According to the exchange they still need to review their proposition to the cryptocurrency space.

The previous bitcoin futures contracts listed on CBOE exchange will still remain listed as the last one shall be expired in June this year. CBOE is also observing the crypto derivatives trading.

People have also been comparing the bitcoin futures trading on CME and CBOE. According to the charts displayed by TradeBlock, the CME bitcoin futures are experiencing much better trading volumes than the CBOE.

CME_vs_CBOE

CME_vs_CBOE

Bakkt: Bitcoin Futures

Bakkt, a platform that all cryptocurrency enthusiasts have been deliberately waiting for, will also be listed bitcoin futures contracts on their trading platform. These are different from the current listed bitcoin futures, as they will be physically delivered to the clients.

Bakkt has been experiencing many delays since the announcement of its launch. The platform was earlier scheduled to be launched last year but since then, it has been continuously facing issues that are leading to the delays.

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How Bitcoin Futures are exploiting BTC Price

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Change in market policies, the evolution of similar competitors and new trades such bitcoin futures are proving a threat for the bitcoin prices. 

Bitcoin is going through a dark phase for the last one year. It was on the peak of the crypto market till December 2017. The price of one bitcoin at that time was around $ 19,783. However, then the bear run entered in the crypto space and the price of bitcoin went down.  Also, there are a lot of factors which are actually not good or say devastating for bitcoin price. Change in market policies, the evolution of similar competitors, new trades etc. are proving a threat for the bitcoin prices. 

Let us discuss such a threatening factor for bitcoin price i.e. Bitcoin Futures. We will see how the Bitcoin Futures actually exploit bitcoin price.

 

1. Bitcoin Futures are easy to be understood by big financial firms:

Most of the big financial firms are well familiar with futures and their exchanges. Wall Street businesses can easily understand the working of Bitcoin Futures. Also, there are easy to be used by these firms. These features of Bitcoin Futures will surely attract these organization to invest a big amount in them. Eventually, it would start acting as a replacement of bitcoin. This all would lead to a drop in interest of bitcoin and finally would act a devastating factor for bitcoin price.

 

2. Transparent settlement price:

Bitcoin Futures use a transparent settlement price which is missing in case of bitcoin. This settlement price would be treated as a reference price which may not be the precise and perfect but as soon the payment is over, it would be written in contracts. This settlement price could be similar to the reference price for golds in the contracts of jewelry manufacturer and sellers. The presence of this reference will simplify the method of payment in bitcoin.

 

3. No tension of missing of Bitcoin Futures:

Bitcoin has a long history of losing their bitcoins and private keys. There have been a lot of cases when due to some silly mistakes, folks have lost their significant amount of bitcoins. This is not with the case with Bitcoin Futures. These contracts don’t go missing. Although there are chances that you may lose your money for sure, you can’t lose them by misplacing the Bitcoin Futures contracts. This is a very big advantage of Bitcoin Futures over Bitcoin and these would surely affect the price of bitcoin in a negative way.

 

4. The creators of Bitcoin Futures are market experts:

Bitcoin and blockchain were developed by technical persons. They didn’t have the adequate knowledge of markets and this was also a reason that bitcoin had to suffer a lot in the market. While on the other hand, Bitcoin Futures are run by market experts. CME and CBOE, both the organization are well known for their knowledge of the market. This is a great advantage with Bitcoin Futures and that is why the experts are predicting that this is not a good sign for bitcoin prices.

 

5. Bounded by regulations:

However, this feature of Bitcoin Futures would be welcomed by some bitcoin users while some would take this in a negative aspect. Bitcoin is a non-government currency and it has no rules and regulations imposed on it. This is one of the main reasons for the huge investment in bitcoin. On the other hand, Bitcoin Futures are bounded by some regulations. CFTC i.e.  Commodity Futures Trading Commission regulates the trading of Bitcoin Futures. Even though the regulations are very simple ones but it has to be followed by each participating user of Bitcoin Futures. The presence of regulation provides a kind of trust and security in the Bitcoin Futures. This feature of Bitcoin Futures might be appreciated by a few users who are currently using bitcoin. Eventually, bitcoin may lose some of its users and this would lead to further fall of price and market cap of bitcoin in crypto space.

 

These are few of the factors and features of Bitcoin Futures which might cost the prices of bitcoin a lot. The current user may migrate to it as well as new users may get attracted to these functionalities. This all would lead to a price drop of bitcoin and hence the Bitcoin Futures are actually not good for bitcoin price.

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Alert: CME Bitcoin Futures Experiencing Record Breaking Volumes

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These days saw the highest and rapid increase ever for Bitcoin futures on the Chicago Mercantile Exchange as the amount exceeded 18,000. Institutional investors are paying attention to this as the bitcoin future contracts get snapped up at an ever-increasing rate.

 

Record of BTC Contract Size on CME:

As per the stats of CME they were 18,338 on Wednesday, which is the highest figure ever recorded till now. This is equivalent to 91,690 Bitcoins or roughly $365 million at today’s prices.

cme-futures-trading-volume

Upcoming contracts enable explorers to bet on the prices rather than to purchase the physical assets. So these figures might be a little misleading.

 

When the new product which offers the physically settled contracts hit the market, they will be paying out in BTC which will drive tremendous momentum for crypto markets. Over the past year or so the expectation of a crypto Exchange Traded Fund (ETF) being launched has been telecasted and dominated the news. The year 2018, has been the year of regulation and cooling off which was only to be expected after the previous year of rampant FOMO and parabolic market action.

 

This year 2019, is expected to be different as many industry experts predict the launch of at least one institutional investment vehicle.

 

As per the Block European exchange giant, Eurex is preparing to launch crypto and bitcoin futures so the list of institutional offerings is increasing rapidly. The cognate exchange is operated by Germany’s Deutsche Börse, which will be offering Bitcoin, Ethereum and XRP imminently according to the report.

 

Exchange traded funds are the future:

In addition to these future products, there is already one type of Exchange Traded Funds that are actually traded through an ETN (exchange-traded note) which allows investors to get direct exposure to Bitcoin prices. The Grayscale Bitcoin Trust (GBTC) crosses the technicalities of buying and storing Bitcoin but still allows investors to get into the action by buying shares that trade at around a thousandth of the price of BTC.

 

GBTC has been highly popular with over $800 million which is already invested in the Bitcoin fund.

 

Furthermore, Bitcoin is the most popular. The fund eliminates the volatility of buying and owning Bitcoin directly which is something that institutions want.

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