While Bitcoin ETFs have struggled with regulatory approval, the new year will usher in fresh opportunities to manage Bitcoin exposure with the introduction of CME options on Bitcoin futures on January 13, 2020. The CME options contract is based on the liquid Bitcoin futures (BTC) contract, which has continued to see growing adoption and customer interest since its December 2017 launch.
According to a noted crypto-market analyst, Bitcoin, which generally leads the way for other cryptocurrencies, could make move higher into year-end if it can stay above some key technical levels this week, which is good news for futures traders and soon-to-be options traders of the crypto.
Bitcoin has recently struggled, but those woes could abate if the digital asset can stay above $8,500 this week, said deVere Group CEO Nigel Green in a note last month. In fact, Green argues that if Bitcoin can accomplish that goal, it could rally to $12,000 by the end of 2019.
“Bitcoin has registered some impressive gains over the last 48 hours after being in a lull period in recent weeks,” said Green. “As of now, it has defied the so-called Death Cross – a bearish pattern that takes place when the 50-day moving average falls below the 200-day moving average.”
If Bitcoin holds around $8,500 or trade slightly higher, it could bring more interest in the form of crypto funds. Investors who are hesitant to jump into crypto assets may see the lower price volatility as a more favorable option to equities.
For the new options contract, 1 Bitcoin Futures contract (which represents 5 bitcoin), is set to trade on CME Globex and CME ClearPort from 5 pm to 4 pm CT Sunday-Friday, and will offer BTC traders the potential to save on margins, through margin offsets.
While there have been some regulatory issues with ETFs related to cryptos, perhaps options could now help pave the way for an ETF. Bitcoin recently got a boost from China President Xi Jinping saying that the country should “seize the opportunity” of cryptocurrency’s blockchain technology. Since the trade war with the U.S., China has been making moves to bolster its technology sector and blockchain could be one of the key areas where it has a competitive advantage over the U.S.
“We must take the blockchain as an important breakthrough for independent innovation of core technologies,” Xi said at the 18th collective study of the Political Bureau of the Central Committee in Beijing.
Investors looking to trade the new Bitcooin options can find out more information from this video at the CME website.
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