Bitcoin Futures

Bitcoin Futures

18 December 2017, 11:55
Dragan Drenjanin

Since last Sunday it has become possible to exchange Bitcoin futures contracts on the Chicago Stock Exchange. But not everyone knows what this means and especially what kind of impact it will have on Bitcoin and on the entire crypto market. Let’s try to understand it together.

First of all, it must be said that this is a very important news, because for the first time in history a contract related to Bitcoin will be exchanged within a regulated market.

Futures contracts are a financial instrument that allows you to make a sort of bet on the performance of any sort of value, or rather try to predict its future trend.

Futures in general can be used to bet on any kind of title, and the eventual winnings of this bet allows to speculate the effect it will have on a given market.

They are an important tool in the financial field because they allow to obtain benefits when the bet is won, and to mitigate losses where the erroneous forecast results in a decrease in the price of the particular asset.

CBOE insideThe possibility of trading futures on bitcoins means, first of all, that it’s not necessary to possess bitcoin in order to bet on their value. And it means, for example, that if an investor possesses Bitcoin but wants to mitigate the losses of a possible risk of a crash in the value of cryptocurrency, he is able to bet against the trend of Bitcoin, mitigating any losses caused by a decrease in market value.

The first futures contracts gave Bitcoin a value between $ 15,000 and $ 18,000, meaning that investors who bought futures contracts expect the price to remain stable or to grow.

The value taken into consideration by the Chicago Stock Exchange is from the platform Gemini, one of the most popular and important crypto exchange, which also includes Ethereum and Bitcoin Cash among other currencies.

The commissions involved in regulating this instrument, however, pointed out that the value of Bitcoin is currently very volatile, and these futures contracts present themselves as highly speculative instruments, with all the associated risks.

But the Chicago Stock Exchange seems not to be the only one interested in proposing futures to its investors.

It seems that the Moscow Stock Exchange (MOEX) is building a cryptocurrency trading infrastructure. But still nothing is certain. In fact, Moscow seems to have a fluctuating relationship with Bitcoin and in general with the cryptomarket, and the regulations on this matter are not yet clear. In any case, the futures securities for now have not yet been implemented and they will not be until the regulatory process of this market will find specific agreements with the Moscow government.

The interest by governments and stock exchanges around the world is beginning to be seriously taken into consideration, but first of all it will be necessary to regulate Bitcoin, a currency that has aroused the interest of many, but which still seems to belong only to a low percentage of the world’s population.

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