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...
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Hey jrcornel,
Very interesting read, Thanks you for sharing it!
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Looks like TDAmeritrade will also start on Monday!
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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!!!
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Good point.
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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
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Yeah Bitcoin steady for now. January people start to wake up watch the increases.
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Agreed. Not expecting too much volatility due to these futures anytime soon.
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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
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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 ?
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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.
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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.
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thanks a lot for discuss about bitcoin..i get news of bitcoin curency..thanks for sharing my friend...✌✌✌resteemit done
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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
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, after January 17th, things could start getting just a bit more interesting... as if they were not already interesting!!!
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beautifull work
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I thought they were starting on Monday? Did I get bad info?
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It's Sunday. You can trace the price here:
http://www.cmegroup.com/trading/equity-index/us-index/bitcoin.html
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Wow! you post is vote and doller very very good.
My steem account @aungminthet.
Wellcome Sir.
Please.
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Man, what is it with these futures starting at such a weird time? I wonder if they are trying it almost as a soft launch to guage demand and ramp up their serves as necessary. The last one launched on a Sunday night as well and their whole site crashed from the traffic before coming up... cracked me up. I teased my wallstreet friend the next morning, since he had always made fun of bitcoin when exchanges would go down and now it was my turn. I was like "Let me get this straight. You chose to launch it at 5pm. On a Sunday- not exactly prime trading hours. And you STILL couldn't keep the servers up? Huh, not so easy is it now?" :D
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it is the same whale and same pond using different rod to fish 😅
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My question for anyone thinking of investing in this futures stock: Why not just buy bitcoin!?
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A lot of wall street firms are banned from buying cryptos because of regulations, but they can buy futures through CME or CBOE. Another use of future is for miners, they are already producing Bitcoins, future allow them to hedge their coins.
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I would like to welcome the new name of your organization. I think the name is really great, I respect your decision
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Thanks for the explanation on how these markets will/will not be able to affect BTC.
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Thanks @jrcornel. Arbitrageurs using "cash and carry" methods were the suggested primary means for actions in the futures trading to affect spot prices, according to a chat between Tone Vays and Richard Heart (published on YouTube yesterday). Please add a comment that clarifies what's involved in these cash and carry methods.
It is reported that TD Ameritrade will allow its brokerage clients to participate in the futures market starting tomorrow.
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where there is 27 hours while a day a night 24 hours I do not believe it's a good language release and easy to understand.
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Kaboom I am so excited
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Why would Wall Street get interested in Bitcoin futures. There is only one answer and I am quite certain nobody here wants to hear it.
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After CBOE contacts went live there was a slight bump. I'd expect that to happen again.
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Hi @jrcornel, This was a much needed article. It cleared my views in many ways. Thanks a lot. I really appreciate your efforts as you always come up with content that bears a lot of value in it for its readers. Great post!
Keep them coming dear @jrcornel.
Steem On!
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I've heard all the popular youtube and steemers taking about the significance and possible affects on Bitcoin. Its really very simple:
Having Futures contracts allows someone to FIX the price of Bitcoin,,, in other words it is now possible for LARGE institutions to either accept or trade in Bitcoin as the can mitigate the RISK of PRICE FLUCTUATION.
Before this, most companies had FEAR of trading in Bitcoin,,,,, as the price could fluctuate wildly, to either the DOWN side or the UP side. This is NOT conducive to "GOOD BUSINESS" were one wants to be able to account for every aspect of their business and NOT leave it to chance.
Now a business may choose to BUY or SELL something in bitcoin, purchase the appropriate Futures Contract to "LOCK IN THE PRICE" of the bitcoin (unfortunately) into US $ (their local Fiat Currency). Companies who want to be able to accept Bitcoin for sales of merchandise now have a sucure way. For example if a company sell on average $100,000 of goods, they can LOCK IN $100,000 of Bitcoin to that value. This is the traditional use of FOREX exchanges with INTERNATIONAL corporations,,, it allows them to FIX the currency value to their home fiat currency.
So,,, In conclusion:
The FUTURES markets should lead to the EXPANSION of use of Bitcoin and therefore INCREASE demand and cause further UPWARD pressure on the price. GOOD NEWS !!!!!
https://steemit.com/bitcoin/@i-am-mark/no-one-gets-it-the-real-significance-of-the-cboe-cme-having-bitcoin-futures-contracts
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Very informative post thanks for sharing. It's Sunday night let's see what with the price of btc
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I think the price of bitcoin can be manipulated easier now that people can trade futures. It is also a way for larger bitcoin holders to cash out if bitcoin ever crashes. Time will tell.
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Hello friendly bot, @jrcornel! Thanks for sharing it,,
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Thanks for sharing. Another big difference is it provides 4 types of futures: 2018 Jan, Feb, Mar, Jun, comparing to the 2018 Jan in CBOE.
Sit tight and HLOD!
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There is more of a problem with the transaction fees being so high, maybe there will be a point where the price is so high that the transaction fees will be a disincentive to the amount of trading and in turn equalise the market. Great post by the way @jrcornel
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Oh and the unexpected happened with BCH today
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This really interesting hope to get more on bit coin
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