Bitcoin futures are a very peculiar investment vehicle. They allow institutional investors to speculate on the Bitcoin price without buying cryptocurrency. Even so, it seems the general interest in this vehicle is still pretty low. CME’s Bitcoin futures are slowly gaining popularity, which is a positive sign.
When CME and CBOE announced their Bitcoin futures, people were genuinely excited. A few months later, and most of that enthusiasm has evaporated. This is mainly due to the falling Bitcoin price, though. Whether or not Bitcoin futures effectively influence the price to such a degree, remains to be seen. As of right now, it doesn’t appear that is the case, as the overall volume is far too small.
Bitcoin Futures Remain a Peculiar Addition
According to CME, things are gradually improving. The interest in futures contracts is pretty significant. At one point, it seemed as if the overall futures volume was increasing every single month. That trend is seemingly still intact as of right now. With the total contracts at 2,500 contracts, there’s still a very long way to go. Institutional investors are still not too keen on Bitcoin as of right now.
What makes the CME futures so remarkable is the international appeal. Nearly one-third of its contracts are purchased by investors outside of the US. Asian traders have always been interested in Bitcoin, thus the futures are of great appeal to them as well. How that trend will evolve, on the other hand, is a different matter altogether. With the Bitcoin price still declining, things are not looking all that great.
Even so, CME managing director Tim McCourt remains rather hopeful. He sees the increase in cryptocurrency regulation as a positive trend. It can certainly bring more legitimacy to Bitcoin and other cryptocurrencies. Whether or not that will lead to more interest in Bitcoin futures, remains to be determined. For now, CME will focus on streamlining its platform and product. That is something well worth keeping an eye on as well.
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