Bitcoin Futures Arriving at the CME
In the world of cryptocurrency, one of the mostly highly anticipated events of the year has been the launch of traditional derivatives products for Bitcoin.
You might first think of the staggering amount of money that will be directly exposed to Bitcoin. But it also marks a significant milestone in Wall Street acknowledging Bitcoin as a legitimate asset, after spending nearly 9 years dismissing or ignoring it.
First announced by the Chicago Monetary Exchange (CME), the foremost products were in fact launched by the Chicago Board Options Exchange (CBOE) this past Sunday, on December 10th.
The much-awaited moment was preceded by a bull run of historic proportions in the king of the cryptos, with exceptional volatility to boot during the final weekend. When the moment came, BTC did indeed see a lasting 5% bump, after the initial traffic boost brought down the CBOE site. (Of course, certain portions of the internet will always be hard to impress.)
But the party is far from over. It was, after all, only the beginning.
But the beginning of what? While there are no shortages of questions about what the future will hold, the ultimate boils down to simple three words:
Up or Down?
While no one knows for sure, more than a few have leaned in to give their opinions on where BTC will go after wall street attempts to sink its teeth in.
The easy answer would be that more money means bigger numbers, but there are alternative theories abound.
It seems that no one can even agree if it will have a stabilizing effect, or spur on another frenzy of volatility, as claimed by the CEO of Bitmex, which currently dominates the Bitcoin derivatives market that has already been flourishing outside of the regulatory sphere.
We at XRay Insight have our answer, but it’ll take a minute to break it down for you…
This is No DotCom Bubble
If you already know your way around the markets and first begin trading actively cryptocurrencies, you might notice some very close resemblances.
But there are a few important differences.
To begin with, don’t underestimate the power of social networks and instant messaging in driving mass awareness.
Back in the heyday of Qualcomm and Juniper Networks (for those of you too young to know or remember were the biggest bull stocks in the “Naz” aka Nasdaq), people communicated via landline phones and things took a considerable amount of time to spread. Now, news dissipates to a global audience basically in real-time.
And let’s not forget that the market for tech stocks was heavily concentrated in the US. The market for Bitcoin is the whole world!
Let that sink in for a moment — every human being with a computer or smartphone can now buy and sell bitcoins. This is unprecedented in the financial world.
Finally, this is the first time in a long time where the 1% — the traditional power and banking elite — aren’t the early ones! (Keep in mind we’re speaking relatively here, as there still a long way to go in this revolution).
And herein, lies the significance of the ‘Bitcoin Futures Arriving at the CME’, the title of this modest article.
The Big Boys Are Late to the Party
Usually, if history is our guide, the banks and financial institutions have enjoyed being first with the masses usually following and driving up the prices thereafter.
But in this case, it’s the other way around.
Bitcoin has been stealthily moving upwards under the radar of most and has now only recently — and quite violently, I might add — grabbed center stage in the financial world.
Can anyone say institutional FOMO?
So where do we go from here? That almost seems a silly question: the answer is naturally up, right?!
Well, hold up for a once second. To be fair, that question begs another question: what is your timeframe?
If you are looking to daytrade this then perhaps we can’t provide the answer you are looking for.
But if you are asking me whether or not bitcoin’s price will be higher 3 months from now, the answer is a resounding YES.
Given the comments we made earlier in this article and the fact that there is some serious FOMO among the institutional community, I would go out on a limb to say that we are at the cusp of one of the biggest bull runs you and I will ever witness in our lifetimes at least.
What people don’t realize is there are still a number of other big catalysts waiting in the wings to make this a ‘multi-stage’ rocket.
The Rest of Wall Street Prepares to Wade In
CBOE may have been first, but they are unlikely to be biggest. CME, who are due to launch next week on December 18th are near four times the size of their Chicago counterpart, so may come with some surprises of their own.
And it seems that the floodgates are opening.
The New York Stock Exchange was caught expressing expressing a bit of regret of their own, saying that maybe they should have been on the ones leading the charge. And while they weren’t specific, NASDAQ had also been caught making similar noises.
Let’s be real, it all comes down to the bottom line, so If CBOE and CME’s products are profitable…it seems naive to assume that others won’t follow suit.
This has also lead to renewed chatter about a possible ETF after those hopes were dashed earlier in the year.
Consider the inevitable entry of ETFs, throw in mainstream adoption with some technological improvements, and who knows what else…and then think of $100,000 per bitcoin.
Not so far-fetched now, is it?
