First it was the CBOE, next up is the CME at 6 pm EST Tomorrow
The CME is scheduled to launch their Bitcoin Futures products at 6 pm EST Sunday evening.
That is roughly just 27 hours from now, I mean if anyone is counting that sort of thing.
The CBOE launched the very first regulated Bitcoin Futures market last week amid tons of excitement.
Many were expecting massive price swings, myself included. That didn't happen.
Will it be any different this time when the CME launches their Bitcoin Futures?
Well it could be and it could not be.
For one, these Futures products are a little different than the CBOE's. The contracts will be made up of 5 bitcoins each, as opposed to 1 bitcoin each for the CBOE's.
Which means, that in order to move a similar number of contracts each day it's going to require a lot more money.
Which shouldn't be that big of deal because in general, the CME futures products do a lot more volume than that of the CBOE.
Like those from the CBOE, these products will also be cash settled, which means they will be tied to the PRICE of bitcoin and not to bitcoin itself.
Which means that no bitcoin will be delivered by or to any parties at the expiration of any contracts.
Which is the biggest reason why we aren't seeing these Futures products have more of an affect on the underlying, bitcoin.
Since they are cash settled, they become more of a predictions market on the future price of bitcoin than a tool to manipulate the price of the underlying.
Which is a very important difference.
Given this information, I would expect more of the same price action that we saw last week with the CBOE launch.
Mostly bullish price action but not too much volatility overall unless something unexpected happens.
Which, last week things opened and ran smoothly, without much of hiccup, well apart from the CBOE website going down briefly because of all the traffic.
If things operate smoothly this week as well, we shouldn't expect to see too many fireworks come Sunday evening, either up or down.
When might Futures markets actually start affecting the price of bitcoin?
Once we get a Futures market that is tied to bitcoin itself, or an ETF that is tied to bitcoin itself, that is when we will see these kinds of products move the price of bitcoin up and down.
For now, it's just another way people can bet on the future prices of bitcoin, nothing more and nothing less.
Really, the only other way is that if some whales get involved and take large derivative bets via the Futures markets, then go into the underlying bitcoin markets and manipulate the price up or down to make their derivative bets profitable...
That is really the only likely scenario given the current set of products that exist as far as something that could move the underlying bitcoin price.
Apart from that we wait for bitcoin settled Futures and ETFs, before they really start affecting the prices.
Stay informed my friends.
Sources:
Image Sources:
https://news.bitcoin.com/cme-patent-physically-settled-bitcoin-derivatives-clearing-system/
https://www.gohawaii.com/experiences/adventure/whale-watching
Follow me: @jrcornel
@jrcornel There can only be 1800 coins mined per day and that will be cut in half to 900 in less than 2 years. Imagine what will happen?
I hope you write about it in the future...
Hey jrcornel,
Very interesting read, Thanks you for sharing it!
Looks like TDAmeritrade will also start on Monday!
I heard that the first moth of this prediction cycle is key. Big institution money is probably waiting for this first month cycle to go by to actually get in the Futures with more money... so, after January 17th, things could start getting just a bit more interesting... as if they were not already interesting!!!
Good point.
I mean with BTC prices skyrocketing I think it makes more sense to try cloud mining because of higher returns. https://hashflare.io/r/7487B9DC 10% OFF voucher: 7487B9DC-10OFF
Yeah Bitcoin steady for now. January people start to wake up watch the increases.
Agreed. Not expecting too much volatility due to these futures anytime soon.
n my blog, I wrote that in the future (according to rumors) on the same stock exchanges, futures for etherium and lightcoin will appear. But to be honest, this was understandable for a long time, since interest in crypto-currencies is only growing, and no one wants to miss a chance, albeit risky. thanks for the info
Why do futures for Litecoin? It is basically a small delta to Bitcoin. Why not have futures for the next crypto to really make it big, like DASH ?
I agree, futures for such crypto as DASH, could make it great, and not only ... you can give many examples. But apparently. the stock exchange looks primarily at the capitalization of the crypto currency and its popularity.
I futures trading on the CME will bring in some bigger players, however not sure how this do in terms of pricing bitcoin. Do you think the futures will allow for more price discovery in BTC? I guess we will find out soon enough.
thanks a lot for discuss about bitcoin..i get news of bitcoin curency..thanks for sharing my friend...✌✌✌resteemit done
Good evening jrcornel, I am glad that you made me aware of how derivatives can manipulate the market by buying millions of bitcoin and dumping it on the market in their favour. I would not underestimate them. Upvote
, after January 17th, things could start getting just a bit more interesting... as if they were not already interesting!!!