Bitcoin – Futures Goes Live
Bitcoin futures went live on Sunday and it certainly didn’t go unnoticed, with the opening of two futures exchanges this week having garnered a significant amount of news coverage in recent weeks.
The Cboe futures market was the first to launch, with the CME Group scheduled to launch its Bitcoin futures contracts on 18th December.
We’ve heard plenty of speculation on the possible effects of the availability of Bitcoin futures on Bitcoin itself and the cryptocurrency world in general. The ability to short as well as go long on Bitcoin futures prices prior to contract expiration expected to lead to increased volatility in Bitcoin.
The vast amount of trades to-date have been long positions, with those looking to take short positions challenged by the inherent difficulties that have persisted in going against the grain. In hindsight, the difficulties will have been a blessing in disguise, but that doesn’t mean that the Bitcoin bears will shy away for ever.
Futures markets not only offers the option to go short, but also provides a leverage platform and this may draw in investors looking to boost earnings, though caution will is needed with Bitcoin’s volatility having shown its teeth in recent days.
Bitcoin futures this morning surged to just shy of $18,000 before easing back with more than 2,000 contracts reportedly changing hands, which is a relatively small number of contracts when compared to other asset classes, but still higher than had been anticipated.
The jump in January’s futures price provided strong support for Bitcoin in the early part of the day today, with Bitcoin gaining 12.01% to $16454.87 at the time of writing in what looks to be another move towards record levels from a weekend that saw Bitcoin fall to sub-$13,000 levels.