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.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
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. :)
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
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.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
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.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
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.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
That's a good view to have IMO. Be careful out there!
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
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.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
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
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Thank jrcornel, concerning futures does that means investor will abandon the stock market and go into crypto futures? Will bitcoin ship be more stable?
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
I hear they are pegged for $10,000 per bitcoin as well?
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
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.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
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.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
I disagree, people will get suckered out op there position like they did with silver in '08 by the big banks...
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
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.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
I mean, if you dont hold is (the key), you dont own it.
The banksters will control this like they control gold/silver.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
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. :)
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
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. :)
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
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.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Yes, great point. No one likes a flash crash... some regulation is needed in these markets.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Roll on the 11th! Making it easier for people to invest should bring in more money but beware the short sellers.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
It will be interesting to see what happens... there may in fact be a bear raid... we shall see.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Possibly. I don’t see that happening but only time will tell.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
It's really pleasure to see your post
Always share informative post, thanks
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
I also want to invest
good job
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
yes , this push me to keep my bitcoins until the 2 week of decembre because bitcoin will remain bullish until the 11/12/2017 , but a little correction maybe will occur due to the holdidays of the end of the year
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Sounds like Ethereum is going to get futures and derivatives as well, is Litecoin next? I think so. Loading up on Litecoin now at $72.00 might be a good idea if we take a second to see which way the wind is blowing.
Thoughts?
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Sounds like a good idea, though I don't follow litecoin at all. It seems to be one of the highly regarded coins though.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Yup. Mainstream as any other. Sold on COINBASE and all other exchanges. Fork of the Bitcoin chain and pretty similar except 84 mill coins instead of 21 mil with BTC
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Wow. Nice post. I am very confused by the CME's listing Bitcoin, especially to be cash settled at the end of the day. I have several questions, perhaps somebody can help me? First, in any futures contract, somebody has to take the opposite side of the deal. So, who is going to take the short position?
I can't imagine anybody with a brain deciding to take the short position? I mean seriously, the float on Bitcoin is much, much lower than everybody on Wall Street thinks it is. It is probably
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
That is what makes a market, some think it's going to go down while others think it's going to go up. Don't forget that futures contracts will better allow for bets on the downside...
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
This will allow a price stability in the use of crypto, therefore enabling better transactions. The scaling issues still won't be solved thought & transactions are still longer, even though these financial instruments allow the price at send & at receiving remain nearly the same.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Nice information @jrcornel visit my post and help me plz
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
You have a lot of awesome posts, but this is by far one of your best ones man. I needed this one today! Thanks.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
I find these limitations very interesting indeed. It's a recognition that we are dealing with an extremely volatile asset class of which the traditional stocks/currency/commodities traders probably have never seen the likes of before.
In traditional stock markets, you have circuit breakers that kick in when the market makes any oversized moves up or down (crypto style). In real crypto trading, you generally have no such guarantees or insurances, your coin could go from hero to zero literally in a split second.
What I find most interesting about the impending arrival of BTC and probably followed by other crypto cash-settled futures is that it could potentially divert a large chunk of funds that would otherwise actually invested in buying cryptos. In effect, these futures contracts are not much more than just a way for institutional traders to bet money on BTC without having to actually buy or handle any.
I wrote a blog about my thoughts on how these futures are not an upward only bet for Bitcoin which may be of interest.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Wow, they really come up with some nice ideas to 'regulate' the trading part and add safety lines to compensate the high volatility. Time to buy some more then =D
The limitations might also add more volume which will be nice as well =D (I think, but please feel free to correct me on that one)
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
nice post
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Congratulations @jrcornel, this post is the sixth most rewarded post (based on pending payouts) in the last 12 hours written by a Superhero or Legend account holder (accounts hold greater than 100 Mega Vests). The total number of posts by Superhero and Legend account holders during this period was 29 and the total pending payments to posts in these categories was $744.84. To see the full list of highest paid posts across all accounts categories, click here.
If you do not wish to receive these messages in future, please reply stop to this comment.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
great info thanks for sharing
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Heavy article with great ideas
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit