Futures exchange operator CME group has announced that it plans to begin offering bitcoin futures contracts starting in early 2020. Futures were originally launched at the end of 2017. At press time, more than 3,000 people are trading futures and approximately 20 successful expiration dates have occurred since their integration.
Bitcoin Futures Are All the Rage… Right?
Tim McCourt, global head of equity index and alternative investment products at CME says:
These new products are designed to help institutions and professional traders manage spot market bitcoin exposure, as well as hedge bitcoin futures positions in a regulated exchange environment.
In addition, roughly 7,000 bitcoin futures contracts (equal to about 35,000 bitcoin units at the time of writing) have traded each day on CME beginning in 2019.
It’s easy to get caught up in the hype and hoopla surrounding new products like futures contracts, but two big questions come to mind: how much can they really do for bitcoin and cryptocurrencies, and how much will people really get into them?
At first, one’s automatic answer might be “a lot,” but if one were to look at the facts as of late, there’s a lot to consider. Take the notion of a bitcoin exchange-traded fund (ETF), for example. This product has been in the works for years, but it hasn’t gotten very far. In fact, recently VanEck Solid X, a joint venture that first issued their application for a bitcoin ETF in March of 2017, withdrew their latest proposal for one such product despite a quick and upcoming decision date in mid-October.
The Securities and Exchange Commission (SEC) was set to say “yes” or “no” regarding the application in about one month, which means the company was on the verge of getting its decision after 2.5 years of waiting, so to suddenly withdraw the proposal like that is strange and raises a lot of questions, such as, “Did VanEck Solid X think nobody would be interested all of a sudden?”
Who knows, but this is giving other companies, such as Bitwise, a chance to steal the spotlight with their bitcoin ETF applications. Despite the upcoming October decision dates for these companies, SEC chairman Jay Clayton believes it will be a long time before a bitcoin ETF is approved.
What Can All These New Products Do for the Crypto Industry?
In addition, VanEck recently released a new bitcoin trust product that would have allowed users to trade “baskets” of BTC. Despite the gravity of the product, it made very little headway, attracting only $40,000 (roughly four bitcoin units at the time) in trades during its initial weekend launch.
And, of course, there’s Bakkt, which has encountered delay after delay. Reports have emerged recently discussing what Bakkt, at this stage, could really do for bitcoin should it suddenly move forward.