Wall Street Bitcoin Futures
Wall Street Bitcoin Future
Bitcoin Futures was launched by the Chicago Board Options Exchange (CBOE) to trade for the first time; right after its debut the price of the underlying asset witnessed a surge of 26%. The initial volume of trade was beyond the expectation of dealers, and that’s how the leading cryptocurrency made its grand entry into the Wall Street market.
Futures are an agreement formed to buy or sell products within a specific period of time. At present, the COBE has enlisted three bitcoin futures where each would expire in January, February and March, where the final settlement value of the contract will be based on the price of bitcoin at the Gemini Exchange. The current exchange trade is approximately $16,600, and each contract can be covered with one bitcoin.
The margin rates (amount provided by the trader as collateral for potential losses) of Bitcoin futures are higher than traditional future contracts, with an average rate being 44%, owing to the fact how volatile the currency can be. Further, these contracts are settled regarding cash, which means the final payment, is given to the investors in the form of cash. This typically saves COBE from the hassles of having its own wallet for bitcoins.
How Will This Affect The Price of Bitcoin?
In the beginning, an introduction of bitcoins into a globally acclaimed financial market gave an immediate hike to the price of bitcoin. With CME, Cantor Fitzgerald and COBE and many more renowned names of the Wall Street market reveal that they plan to have it on their game, bitcoin enthusiasts now have a firm belief that this cryptocurrency is here to stay!
Even though it’s difficult to predict how the price of bitcoin is going to influence bitcoin futures, investors must see both of them coming together when their contract settles down. It’s assumed by JP Morgan & Co. that shorting of the coins, would be more straightforward with the help of futures.
Watch Out Below Video to Understand: How Bitcoin Futures Will Affect Price
What Makes Bitcoin Futures Better Than Bitcoin?
The bitcoin futures can be a better financial instrument than bitcoin as:
1. It Gets the Tag of Regulation
Future trading is regulated by the Commodity Futures Trading Commission (CFTC). The good news here is that this regulation is not as generous; rather it provides certain rules and guidelines that traders have to adhere to. These rules are set a proper market for investors and speculators in future contracts.
2. Offered By Experts of the Market
Both COBE and CME have a glorious history of providing successful avenues for selling and buying of future contracts. Thus, the launch would only contribute to its price discovery. This means any information about Bitcoins would be immediately seen on the price of future contracts.
3. Established Firms understand the Language of Futures
The user-friendliness and transparency will attract more traders, making futures more liquid, taking their value to the next level.
Do you aspire to trade bitcoin futures and want to make the most of every order? We are here to make your trading journey a remarkable one! Book a free consultation today, and our industry-experts will ensure that you are able to maximize your benefits from this volatile market.