CME plans Bitcoin Futures launch, as the new indexes from the world’s largest futures exchange operator are designed to keep track of Bitcoin's price. Which advantages will Bitcoin investors enjoy?
CME plans Bitcoin Futures launch
The estimates from CME Group Inc. could be utilized as building blocks for futures contracts that would significantly simplify the trading of Bitcoin for both professionals and individual investors. The new CME indexes “are clearly precursors to a listing of some kind” of the futures contract, according to the chief investment officer at Global Advisors, Daniel Masters. He has commented:
“There is tremendous pent-up demand in the U.S. for Bitcoin exposure that doesn’t require an investor to select one of the current Bitcoin exchanges in order to invest.”
Trading the digital currency can be theoretically tricky. As the US brokerages generally do not provide a method to trade Bitcoin, people who want to sell or buy it need to place accounts directly with cryptocurrency exchange. There is a number of such exchanges around the world, and many of them are small and somewhat regulated.
However, in case key futures exchange operators, such as CME establish exchange-traded funds tied to digital currency, the process of investing in Bitcoin would become similar to trading commodities or stocks.
Will CME help raise Bitcoin reputation?
CME currently is associating itself with cryptocurrency, which has an uncertain past, by entering the Bitcoin arena. In the previous period, the digital currency has been correlated with the criminal organizations such as Silk Road. The bad fame of digital currency exchanges stems from a series of high-profile cyberattacks. Moreover, Bitcoin is highly volatile, as the price of the single coin has soared from $552.82 in August to $700 today.
CME could be risking its name by collaborating with Bitcoin exchanges, according to the lecturer at Boston University and critic of the digital currency, Mark T. Williams. He has commented:
“Bitcoin pricing is still in the Wild West stage with unregulated bucket shops influencing daily price discovery.”
CME Group Inc has stated that its new indexes are taking their roots from the data contributed by six Bitcoin exchanges, such as China-based OKCoin. CME spokesman has stated:
“Our products launched will bring greater transparency to the bitcoin market. We have a long history of developing nascent markets across asset classes for this same reason.”
The digital currency exchanges contributing data to CME’s indexes “have been extensively vetted,” the CME spokeswoman has additionally stated.
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