Executives of JPMorgan Chase & Co. believe that CME Group is going to be the company that dominates the bitcoin futures contracts arena.
CME Group Is Heading the March
As we all know, other markets have opened the doorway to bitcoin futures trading in the past, a big example being Bakkt which began business in September 2019 after a long year of delays. The platform experienced a rather lackluster debut and is widely considered to be the reason for bitcoin’s dismal price performance just days later.
While Bakkt eventually picked up steam in the later months, CME Group has one thing that other companies like Bakkt don’t: experience. CME has been in the business of offering bitcoin futures for approximately two years. It also allows people to settle their contracts in USD, whereas Bakkt is strictly based in and around bitcoin.
While this may be a good move for the industry in general, it does present something of an issue in that those who are not entirely used to bitcoin or ready for crypto just yet are likely to think twice before getting engaged. Thus, perhaps getting started in bitcoin and settling in cash is the right way to go.
Either way, Nikolaos Panigirtzoglou – a strategist at JPMorgan & Chase – says that CME is beginning to offer bitcoin futures on regulated changes, which is likely to lead to major change in the crypto arena. He writes:
There has been a step increase in the activity of the underlying CME futures contract over the past few days. This unusually strong activity over the past few days likely reflects the high anticipation among market participants of the option contract.
While he’s bullish in the long run, he does comment that there may be a few more drops in the mix before the industry can completely settle itself and get back on track. He explains:
The market price has declined by nearly 40 percent from its peak while the intrinsic value has risen by around ten percent… The gap has not yet fully closed, suggesting some downside risk remains.
CME appears to possess power that few bitcoin and cryptocurrency companies possess. The price of bitcoin, for example, peaked in December of 2017 at nearly $20,000 per unit – right as CME was debuting its new bitcoin futures trading program.
Bitcoin Is Moving Back Up
By contrast, Bakkt – which experienced more than a year of hype and hoopla surrounding its alleged prowess and stability – is widely associated with one of the most dismal and unanticipated price drops in the history of the bitcoin space.
At the time of writing, bitcoin is back up above the $8,000 line after having spent yesterday (briefly) hovering at around $7,900. Some sources claim it has been trading for as high as $8,200 on exchanges like Bitstamp in Hong Kong.