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Bitcoin Futures

Bitcoin Futures

  • December 5, 2017

Bitcoin Futures – What This Means For Your Future

Thanks to Bitcoin futures trading starting in just five days, a Bitcoin clampdown in the United States is now off the table. The SEC and FTC won’t fool around with Bitcoin now that the CME and CBOE are involved, bringing institutional order to Bitcoin chaos. With published guidelines already out there (such as a 20% price swing leading to a halt in trading) Bitcoin futures look very bright indeed.

Many were surprised by the sudden announcement made by the CBOE (Chicago Board Options Exchange) yesterday to start trading in Bitcoin futures on December 10th – eight days ahead of the previously announced Bitcoin futures trading options that will be offered by the CME (The Chicago Mercantile Exchange).

Bitcoin enthusiasts are hopeful that a bitcoin ETF (Exchange Traded Fund) might be coming. Indeed, the SEC denied an application filed by CBOE earlier this year on the grounds that the cryptocurrency was “unregulated,” but CBOE head Ed Tilly said he plans to reapply with the SEC for a Bitcoin ETF. This new application is widely favored to be approved now that Bitcoin futures – and related market-based rules – will be in effect.

The argument may be helped by two features that will be a part of trading Bitcoin futures: price limits and margin rates.

bitcoin futures

The CBOE and CME will have margin rates of 30 percent and 35 percent, respectively, where a lot of money will also be made.

Shark Tank’s Mister Wonderful was recently quoted as saying he tried to short Bitcoin but couldn’t. He should be happy to know that he will be able to short Bitcoin now. In addition to being able to short bitcoin, there’s considerable speculation about whether futures will lower or increase the volatility level of bitcoin. We predict that Bitcoin will continue its unstoppable course of ever-increasng value with lots of ups and downs as history as already shown.

The CME says it will be using price limits that kick in during gains or losses of 7 percent, 13 percent and 20 percent that would slow trading with a complete halt at a 20+/- swing based on the prior day’s closing price.

Upping the ante while heating up the Bitcoin futures war, the CBOE made a point to say trading would be free through December, with no published fee schedule for January as yet.

The CME says Bitcoin futures will be priced at a premium in line with the pricing conventions of other premium products. We see this putting upward pressure on Bitcoin pricing. With the recent price surges of Bitcoin tied to the news of futures trading I see Bitcoin as having a very bright future.

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Seth Fields