Bitcoin Futures Release Date Moved up to Sunday December 10
By: Luke Roth
Tags: Bitcoin, Investing, Finance, Cryptocurrency, News

Initially announced as available December 18, a new futures exchange will allow purchases beginning December 10.

With futures options becoming available, will we see a rise in the value of Bitcoin? Image by Pixabay.

Today, Chicago Board Options Exchange Inc. (CBOE) announced they will become the first exchange to offer futures on Bitcoin, offering futures this Sunday, December 10th. This announcement moves Chicago based exchange CBOE ahead of its nearby competitor, and the largest futures exchange in the world, the Chicago Mercantile Exchange (CME). CME had previously announced it would be the first to offer futures on Bitcoin, marking the official release date at December 18, so by CBOE announcing an earlier date, they are essentially attempting to undercut CME and take a majority control of the market before CME even has a chance.

In the announcement, Ed Tilly, CEO of CBOE Global Markets said, “Given the unprecedented interest in bitcoin, it’s vital we provide clients the trading tools to help them express their views and hedge their exposure”. This seems like a well thought out way of saying, “We see an opportunity to make money and don’t want to let it slip away”. However, he’s probably right, for both the exchange and the investors. The futures of Bitcoin are trending upward, as demand is at an all-time high, and the possibility for Bitcoin to become a regularly-used global currency becomes ever more real.

Both exchanges have been approved for Bitcoin futures trading by the Commodity Futures Trading Commission. The Bitcoin futures traded at CBOE will be marked by “XBT”, and cash settled against the price at Gemini Trust, a major digital currency exchange. This could lead to more futures price volatility at CBOE when compared with CME, which will be using four Bitcoin exchanges (Bitstamp, GDAX, itBit and Kraken) to cash-settle their contracts.

Chicago-based exchanges CBOE and CME will compete for the majority of the market in what could be a race for billions of dollars. Image by Wikimedia Commons.

What Does This Mean for You

In the recent months leading up to this point, we’ve seen a trend of major investors wanting to get into cryptocurrencies, but shying away due to the volatility and risk associated. Basically, big-time investors have seen better uses for their money in safer funds, despite gaining less profit overall. Due to several recent announcements, including IRS requirements for owners of cryptocoins, and now the implementation of futures trading, investors can now see a way to invest in this industry without assuming as much risk. Because Bitcoin has been prone to steep gains and losses in very short periods of time, investors will use Bitcoin futures to hedge their overall investment, limiting profits to protect against potentially major losses.

JPMorgan, the company whose CEO had previously said he would fire any employee that invests in cryptocurrency, has now released a statement citing the value in Bitcoin.

“The prospective introduction of bitcoin futures has the potential to elevate cryptocurrencies to an emerging asset class” ~JP Morgan Representative.

JP Morgan's CEO literally called Bitcoin “a fraud” not two months ago, and now the investment agency is stating that they see value in cryptocurrency, and upon their release this month, will be allowing users to purchase Bitcoin futures.

As an owner and strong holder of Bitcoin, among other coins, I see this as a sign that the value of cryptocurrencies will continue to increase for the foreseeable future. My reasoning for this is that major players in the financial industry are beginning to see the value in cryptocurrency, and once that value is made available, values will continue to climb. Cryptocurrency provides a solution to many of today’s problems, including the need for paper currency, as well as issues associated with nationally exclusive currencies. It is encouraging for owners that major investors now see value in cryptocurrency, because major investors and governmental entities seem to be the two largest powers holding the cryptocurrency market back from becoming commonly used. Now that major investors are testing the market, cryptocurrencies are coming one step closer to common use.

Bitcoin Futures can be seen as a positive by investors and sellers alike.

I am thrilled to see Bitcoin futures offered on multiple exchanges. This will increase price competition, and should allow individual investors like myself a fair shot at the market, when otherwise major investors would snap them all up before individuals with smaller funds and less avenues into the market even have a chance. Additionally, to see some investors who were previously so against cryptocurrency now admit that they see value in it is very encouraging. With the release of futures, the value of Bitcoin should rise, and with it, the value of most other coins. I’ll be anxiously holding my coins for now, watching the value as it moves in the days leading up to the 10th and 18th. Think I’m right, wrong or crazy? Let me know in the comments below!

Images courtesy of Pixabay and Wikimedia Commons