Calls and puts on bitcoin

In the November issue of the Modern Trader there’s an article about cryptocurrencies gradual move to acceptance.

One of the key points is that in order to add credibility and bring in institutional participation cryptocurrencies has to get a plug-n-play feature in the forms of a derivates market.

Currently, you can trade bitcoin and other cryptocurrencies on several spot exchanges. This works okay for the early adopters. But, to be honest, the UX has room for a lot of improvement. And it is not compatible with the hedge fund operations.

Two important events for cryptocurrencies becoming an actual asset class:

  • LedgerX being the first receiving regulatory approval for bitcoin options.
  • CBOE announcing the launch of a futures market on bitcoin in collaboration with Gemini and the Winklevoss brothers sometime beginning of 2018.

Although these recent events will lead to significant growth there are a couple of issues:

  • Trading bitcoin is not centralised which could be standing in the way of bitcoin becoming a real asset class.
  • The lack of a reliable index for settlement price.

Finally, another minor event for growth is XBT Provider, known for being the issuer of the world’s first bitcoin ETN, announcing the new trackers for ETH on Nasdaq Stockholm.

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