Bitcoin: the currency revolution in the making

Marco Green
December 17, 2017

Ethereum, Litecoin and Ripple all reached record highs and have hugely expanded their market capacities.

All the hoopla surrounding the USA debut of bitcoin futures has renewed fanfare regarding when exchange-traded products, including exchange-traded fund based on the cryptocurrency will debut.

Cboe Global Markets launched its bitcoin futures contract on December 10, just over a week ahead of rival CME Group, as the exchange operator takes the next step toward launching an exchange-traded fund based on the digital currency. This elevated status will be given a further boost in the coming days as two more players enter the game.

According to CNBC, large institutional firms such as JPMorgan and Morgan Stanley will soon allow their customers to trade Bitcoin futures.

The warning underscores that even as Washington makes it easier for bitcoin to move out of the shadows, worries remain that the mom-and-pop investors who've helped fuel its rise have little idea what they're jumping into.

The third exchange to offer Bitcoin trading is TD Ameritrade which controls the largest futures operation of any online brokerage firm.

After previously pulling plans for a bitcoin ETF because the futures market was non-existent at the time of the original filing, VanEck recently updated that filing. This will result in a lot more liquidity and a lot more participation from retail traders.

In order to be eligible to trade the futures, clients must have a minimum balance of $25,000, according to the brokerage. The one who would like to participate in a volatile financial market but would not like to own the actual cryptocurrency.

"As a fully regulated exchange, we need to address all of the above and more, before we can launch products", the spokesperson said. "We want to see how the market reacts".

Here's the bad news: volume in the Cboe contract has been very small. Around $60 million in notional value has traded each day on average.

The majority of crypto currency traders are based in Asia, outside the U.S. where futures contracts are not available and the digital currency is traded directly. Listing these contracts will allow both institutional and retail investors to obtain long or short.

As Bitcoin continues to grow in value and to be accepted as a mainstream financial asset, this trend will most likely continue to gain momentum.

Other reports by Click Lancashire

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