Bitcoin futures made their debut on Sunday and they were like anything is with cryptocurrencies subject to a strong debate. It seems that the public was divided into two, the critics that argue that the contracts are premature and present a danger due to the volatily of the digital currency market, and the Digital currency fanatics that believe that introducing futures will transform bitcoin and provide a venue for professional traders and institutional investors to enter, and legitimise the market.
Futures allow investors to speculate whether the digital currency’s price will go up or down without having to purchase Bitcoin. Within a few hours, investors started betting that bitcoin’s value will increase even higher.
The introduction of futures to Bitcoin is the first time that a government-regulated exchange has allowed trading for a digital currency. Once the news was released from Cboe Global Markets, a top U.S owner of financial exchanges, their website tweeted that they were experiencing “heavy traffic”.
The start of trading is a first in the history of trading as unlike commodities, bitcoins aren’t physical assets and unlike traditional currencies there is no central bank that backs the currency. They only live on computers and are produced by complex algorithms recorded in a digital ledger.
Stephen Bielecki, an attorney with Kleinberg Kaplan reported to CCNMoney that the offering of bitcoin futures could help “rationalize” the price.
Bitcoin has seen good results from the activity in the Chicago exchange. From an increase of almost %1500 since the start of 2017 it jumped to 8% in approximately 10 minutes after the futures trading began. By late Sunday it was trading above £16000.
Currently, bitcoins are bought and sold on unregulated virtual exchanges. It is positive that the market has allowed the introduction of a government backed exchange proving that bitcoin is more than just a bubble and needs to be taken seriously.