It's Official: CME confirms that Bitcoin Futures will launch Monday December 11th
That's right, the bitcoin markets are about to change forever in about 3 weeks.
CME published an update on their website giving some specifics as to when futures might be launched.
The update can be seen here:
"Effective Sunday[,] 10 December 2017 for trade date Monday[,] 11 December 2017, and pending all relevant regulatory review periods, please be advised that CME will launch Bitcoin Futures."
This update comes on the heels of CME CEO Terry Duff stating last week that bitcoin futures products could be launched as early as the middle of December.
It turns out he was right.
The company confirmed his prediction with the updated posted on their website this morning.
Futures Products have been in the pipeline for some time now.
First it was LedgerX launching products for institutional clients:
https://steemit.com/derivatives/@jrcornel/it-s-official-regulated-derivatives-markets-are-here
Then it was the CME and CBOE saying how they hope to have futures products in the near future:
https://steemit.com/bitcoin/@jrcornel/bitcoin-etfs-are-likely-on-the-way-says-cboe
It looks like the CME beat the CBOE to the punch. Though, both organizations say that they think futures products are going to ultimately open the door for ETFs.
Which in my opinion will be the real game changer.
How will these futures products be structured?
According to previously publised reports from CME, each contract will consist of 5 BTC.
Prices will be based on CME's existing bitcoin price indices.
CME has spend the better part of the last two months testing its CME CF Bitcoin Reference Rate. The index leverages price data from several global bitcoin exchanges located in Asia, Europe, and the United States.
Spot limits are set at 1,000 contracts.
Minimum price fluctuations are pegged at $5 worth of bitcoin, which represents a total of $25 for each one.
There are even some volatility ranges put in place to help guard against wild price swings.
Price fluctuation limits equal to 7% above or below prior settlement price and 13% above or below prior settlement price as well as a price limit of 20% above or below the previous settlement price will be in place.
Trading will not be permitted outside the 20% above or below prior settlement prices.
My thoughts:
If the above price range limits sounded like a different language to you, you are not alone.
The good news is that there will be some volatility limits on these products. After all the whole purpose of these things is to help large institutional investors better define their risk.
That is the whole reason they are interested in products like this in the first place.
Another advantage of using these types of products is that the fear of losing your bitcoin wallet, or the exchange holding your bitcoin getting hacked, completely goes out the window.
That risk gets transferred on to someone else, which is really a non trivial risk when dealing with these things.
Overall, I think these things finally coming online will be big for bitcoin and cryptocurrency adoption. It further identifies this as a legitimate asset class and represents the turning of a page in the life cycle of bitcoin and cryptocurrencies.
Stay informed my friends.
Sources:
https://www.coindesk.com/cmes-bitcoin-futures-likely-start-trading-december-11/
Image Sources:
https://www.worldcoinindex.com/news/cme-group-to-launch-bitcoin-futures-contract-on-december-10
http://mjreed.com/he-still-has-scars/
Follow me: @jrcornel
It will be interesting to see how the short market impacts the BTC price. It also seems like CME is about to become one of the largest buyers of BTC.
Yep. Which one will have the greater impact? There is a 500 million dollar hedge fund slated to go live in early 2018, and if you apply normal hedge fund leverage, they could be buying (and selling) about $2.5 billion worth of crypto, that should impact the markets. :)
Are you referring to Novogratz's hedge fund?
Do you think the short pressure will start to make BTC less volatile? Could the CME markets have that much of an outsized influence?
Further, do you think these sorts of financial instruments defeat the purpose of having digital currency? I am glad it's legitimizing the crypto space, but to have an instrument to track money seems a bit strange to me.
Yes, the Novogratz fund, it will be one of the largest crypto funds in the space.
I think it will probably help reign in some of the volatility yes, it will provide some sellers on the way up and ensure buyers on the way down. Not bad things in my opinion.
I see your point about defeating the purpose, but I think this was always coming. Anyone who thought bitcoin was going to make governments irrelevant was dreaming.
At some point decentralized money might take over, but we are a long ways from that happening. The best thing for that is getting bitcoin and bitcoin like investments in as many hands as possible. At least in my opinion.
I am honestly hinking there could be a pullback shortly after a big rise in the price after the futures market opens. Hedge funds and institutional investors aren't dumb. They will know they can get a better price by shorting the market. I would think they would want to get a better price and then start the big buying. Something I'm going to keep an eye on at least.
That's a good view to have IMO. Be careful out there!
Always have to be on the lookout, that's for sure. I'll be ready with a plan for both outcomes. Money to be made in up and down markets.
This is huge for btc. Watch prices go bullish first and second week of December. Who knows we might see btc hit $10k before the end of the year
Thank jrcornel, concerning futures does that means investor will abandon the stock market and go into crypto futures? Will bitcoin ship be more stable?
I hear they are pegged for $10,000 per bitcoin as well?
This is huge for cryptos! It will benefit the whole market, bitcoin could skyrocket, good opportunity to buy some altcoins as attention shifts all on the king.
Nice. I do think the risk of a hack and cleanout of people's wallet makes them hesitate to put a lot of money into bitcoin as an investment but this should provide an alternative to invest but without the wallet risk.
I disagree, people will get suckered out op there position like they did with silver in '08 by the big banks...
Not sure what you mean by this, he is saying that it will provide an alternative to having to own and keep track of crypto wallet keys in order to participate in the space.
I mean, if you dont hold is (the key), you dont own it.
The banksters will control this like they control gold/silver.
True, but I'd rather own shares that have insurance attached to them in case of theft or loss, than something that I am "shit out of luck" with if I happen to lose it... but that is my own personal opinion. To each their own. :)
Yes, exactly. To be honest if an ETF existed I would probably sell everything I own in my crypto wallet and just hold etf shares (of each particular crypto), but that is just me. :)
This is going to be the start of tons of different markets being opened up. I am really glad they are putting the price range limits in place. With how volatile crypto can be it is really necessary. I can only imagine down the road the number of derivatives that will exist, and if volatility is the same but there are no range limits in place, there will definitely be people getting killed when a flash crash or big boom occurs.
Yes, great point. No one likes a flash crash... some regulation is needed in these markets.
Roll on the 11th! Making it easier for people to invest should bring in more money but beware the short sellers.
It will be interesting to see what happens... there may in fact be a bear raid... we shall see.
Possibly. I don’t see that happening but only time will tell.
It's really pleasure to see your post
Always share informative post, thanks
I also want to invest
good job