There was much expectation around the launch of Bitcoin futures, and they lived up to the hype.
There is adoption, like a few shops in Japan installing Bitcoin POS, and then there is adoption like CBOE and CME announcing that investors will be able to trade on Bitcoin futures. The latter has made a much bigger impact on the market as this can be viewed as the beginning of a new era.
Bitcoin Futures began in earnest at 5 p.m. Central on Dec. 10th and immediately, there have been some interesting developments.
The storm before the hurricane
No one knows how futures will affect the market of Bitcoin yet. They are pretty powerful investors tools which will allow for those with huge bankrolls to join the frenzy with the safety of futures.
It means that there will be an influx of money into the already burgeoning market, but instead of a stream, it will be a torrent. This effect has already been seen, as the market took a massive spike after a dip was felt.
However, it is important to look back at what came in the run up to the futures announcement. There was a huge rally that really began just after the announcement was made that futures would be coming. That announcement helped Bitcoin past $7,000.
But as time grew closer to the futures announcement, Bitcoin hit a new wave of mass adoption and recognition, disputing a huge number of individuals to join in. This saw Bitcoin crush the $1,000 milestones all the way to just short of $19,000.
The inevitable dip followed, and that was put down to some profit taking of those who had probably joined barely a month previously. But as the futures announced, the price rocketed up again.
Crashing the future
To demonstrate the interest in the futures, CBOE were taken well by surprise as they faced too much traffic, ultimately crashing the site a few minutes after it all kicked off.
Due to heavy traffic on our website, visitors to https://t.co/jb3O722hoo may find that it is performing slower than usual and may at times be temporarily unavailable. All trading systems are operating normally.
— Cboe (@CBOE) December 10, 2017
Clearly, the decision to launch futures has been keenly taken up, and this is only the beginning. Another futures launch is scheduled for a week’s time.
It can be liked a little to the first few people to take an Uber, use an Airbnb, or other such groundbreaking moves. Futures represent a new asset class to the traditional investors, but it also represents a new market for a Bitcoin community where the big influences and money is tied up in only a few people.
What the future holds?
There really are two sides to the futures coin. One is that there is more money being poured into a market that is growing exponentially, but is still relatively small, but there is also the side that says these new investors may be ‘killer Whales’ out there to cause some damage to this new market.
For the first time in Bitcoin’s existence, there is a real chance to profit from a lull or a crash or a dip in the market as futures allow for protection of price, and a change for shorting.
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Author: Darryn Pollock