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December 10, 2017

Major investment firms are preparing to offer Bitcoin futures

by John_A

Bitcoin has seen rapid growth this past year, but the virtual currency’s growth has increased more than its monetary value. It has also increased the coin’s credibility as an investment. Bearing testament to this is the fact that  major investment firms are getting ready to offer Bitcoin futures, as reported by Business Insider.

The first of these firms is the Chicago-based Cboe Global Market, which is expected to launch its exchange on Sunday. One of the company’s main rivals, CME Group, is expected to offer its own future exchanges later this month. Nasdaq is also getting ready to launch an exchange, but it won’t be ready until the second half of 2018.

Futures are basically a form of gambling where two or more parties place a bet on the price of the certain item at some point in the future. The concept has been around for more than a 100 years, and is normally handled by professional firms and investors. The winner of the “bet” is then paid either in cash or in the form of the item that is being speculated upon. In the case of Cboe Global Market’s Bitcoin futures, the winner is paid in cash rather than Bitcoins.

Those who are interested in getting involved in the Bitcoin futures market should know that, due to the instability of the Bitcoin marketplace, the group is requiring all investors to have at least 44 percent of the settlement price set aside for the bet. This practice is fairly common in future exchanges, but the percentage normally hovers around 10 percent.

Instability is certainly one of the biggest fears that investors have regarding Bitcoin. Many believe that the market isn’t mature enough to support futures exchanges, and the price of Bitcoin has experienced some rather rapid fluctuations in recent months. Currently, the coin is valued at $15,298, but it should be noted that it went as high as $19,000 before falling back down to the $15,000 range.

While the risks are blatantly apparent, there are many who excited by the prospect of major investment firms getting involved in Bitcoin, as it might open new doors for other cryptocurrencies.

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