Categories: Bitcoin Business

Will More Bitcoin Futures Be Big For Markets, or Are They Bad News?

Click here to view original web page at www.newsbtc.com

Looking back at when derivatives products were launched for other asset classes may offer some insight as to what will happen to Bitcoin markets. Analysts have been doing just that and the results are extremely bullish on paper but there could be some differences with crypto assets.

Bitcoin Futures Good or Bad?

To draw comparison, trader and analyst Luke Martin has taken a look at performance charts for gold and oil following the introduction of derivatives products.

“Charts showing the growth of commodities markets after low-friction derivatives products (like ETFs) were introduced. If the $BTC market is similar at all, it would have a massive impact on market expansion.”

Charts showing the growth of commodities markets after low-friction derivatives products (like ETFs) were introduced.

If the $BTC market is similar at all, it would have a massive impact on market expansion.

chart from @rusnewton98 blog: https://t.co/9yEVhcASR2 pic.twitter.com/uHDZnp1wTA

— Luke Martin (@VentureCoinist) September 9, 2019

In both instances the futures volumes grew much faster than those of the physical asset. This indicates that these products were designed for institutional traders that want some of the market action without getting their fingers dirty with the actual asset.

If the similar were to happen to Bitcoin markets, it may only be beneficial to BTC if the futures were physically settled, i.e. paid out in BTC and not USD. In 2017 both CME and CBOE launched similar products which allowed investors to short the asset for the first time which many have attributed to the massive bear market that followed.

The difference this time around is that Bakkt will be offering physically delivered Bitcoin Futures contracts; due to launch on September 23rd. Yesterday, the company announced that its digital storage facility was open for deposits.

“The Bakkt Warehouse allows for the safe, secure storage of bitcoin, representing a milestone as we prepare for the launch of the Bakkt Bitcoin Daily and Monthly Futures contracts on ICE Futures U.S.”

The Bakkt Warehouse allows for the safe, secure storage of bitcoin, representing a milestone as we prepare for the launch of the Bakkt Bitcoin Daily and Monthly Futures contracts on ICE Futures U.S. (@ICE_Markets)https://t.co/LT1335ik1P

Just a few days ago a huge BTC transfer was observed which is possibly related to this. In the blog post that Russell Newton penned comparing the commodities markets, he added that large institutional buyers are unlikely to want to take physical settlement in digital assets, adding;

“It is much more likely that these institutional investors will take synthetic exposure that provides them with the price volatility of digital assets without all of the underlying execution risk and operational risk.”

He continued to state that there has also been a steady, but often volatile, flow of finances into this asset class which is likely to continue regardless of any institutional gambling products that hit the markets. The short term impact on BTC markets remains to be seen as the asset continues to consolidate but in the long term it has definitely cemented its status as a new and viable asset class.

Tags:bakktbitcoinetffuturesInstitutions BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?

cinerama

Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

Disqus Comments Loading...
Share
Published by
cinerama

Recent Posts

Bitcoin Futures Contracts Headed Our Way in Early 2020

Futures exchange operator CME group has announced that it plans to begin offering bitcoin futures contracts starting in early 2020.… Read More

4 hours ago

History Suggests Bitcoin is Currently in Early Stages of Next Bull Run

After briefly incurring a significant influx of buying pressure, Bitcoin (BTC) has once again lost its momentum and is now… Read More

4 hours ago

Blackstone CEO Sees Blockchain’s Merit, But Is Not a Fan of Bitcoin

The traditional investment world has largely found itself split on whether or not Bitcoin and other cryptocurrencies constitute sounds investments,… Read More

4 hours ago

Crypto Tidbits: Bakkt Bitcoin Futures Inbound, NASA Hints at Blockchain Ambitions, Libra in Hot Water

Another week, another of Crypto Tidbits . While Bitcoin (BTC) effectively ended the week where it started in terms of… Read More

4 hours ago

Is Bitcoin Diamond growing in popularity?

Bitcoin Diamond (BCD) is a late-2017 implementation of the Bitcoin protocol that offers a larger supply, bigger block size, and… Read More

4 hours ago

3 Proven Methods To Earn Money Online With Bitcoin

It's possible to pay your bills with money earned from the cryptocurrency market. Everyone can generate additional income, or even… Read More

4 hours ago

This website uses cookies. We use these cookies to collect data about your interaction with our website for the purpose of continuously improving your experience with our site. For more information we encourage you to read our privacy policy.

Read More