Bitcoin, Cryptocurrency And Blockchain News

Futures Contracts Come to Month end With Mixed Reactions From the Market


The expiration of the CBOE Bitcoin futures contract may come as a disappointment to many, given that so far, the verdict is neither here nor there. Expectations were high just a month ago as the introduction of the CBOE futures trading hit the cryptocurrency universe. It was projected by most that the new developments would bring about liquidity and mainstream attention, making Bitcoin and the crypto ecosystem much stable. However, as January 17th marked the end of the contracts, it looks as if not everything went according to plan.

Granted, the beginning saw lots of criticism with doubts about the possibility of a futures contract in an extremely volatile market.  But, obviously, Bitcoin can survive being shorted. As a matter of fact, the Commodity Futures Trading Commission (CFTC) notes that the New Year saw more than 1900 shorts contracts in the second week alone.

But it wasn’t exactly a bed of roses for Bitcoin. The introduction of the CBOE futures contracts saw the price of Bitcoin struggle to stay afloat, finally falling slightly below the $10,000 USD mark in the past few days.

Futures Contracts Taking on a Life of Their Own

However, beyond the hype of the futures contracts that made up the better part of conversations in the crypto space, the CBOE contracts took on more significance, inspiring expectations of Exchange Traded Funds (ETFs) being taken up by the US Securities and Exchange Commission (SEC) on the New York stock exchange. So far though, that remains to be seen.

But even then, expectations are high for the entrance of Nasdaq and Cantor Fitzgerald into the futures craze, although the narrative might change if the price of Bitcoin continues to plummet. Basically, Wall Street players are looking for a steady market before they can fully participate.  After all, it’s no secret that Wall Street complains about the market while simultaneously inviting more government intervention and regulation, only to then insulate itself from the violent volatility.

The Difficulty of Establishing a Smooth Market

But let’s face it, with cryptocurrency there are simply no hard and fast rules on how to implement government regulations as the whole space is currently like a financial wild west. In fact, some enthusiasts are eagerly waiting for options trading, considering the closing of contracts can lead to a relative calm in the market.

But that is also yet to come to fruition, since options and alts will require futures contracts to be closed smoothly over several months. In addition, to make options successful, there would be the need for large open interest that is currently hard to come by in the market.

However according to the CBOE President’s quotes on Bloomberg, there might just be more future contracts in altcoins that traders should expect soon.

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Do you think the recently-expired Bitcoin futures contract was a positive development to Bitcoin and the general cryptocurrency market? Share your thoughts in the comments section.