The Chicago Board Options Exchange (CBOE) launched Bitcoin futures trading on December 10, 2017.
Over 4000 contracts were traded on the first day, causing two temporary trading halts as a result of the high volume.
Bitcoin Futures increased by about as much as 26% over the course of the first trading day, while Bitcoin itself hit a new all-time high of $17,270 during the same trading session.
The Bitcoin futures contracts are identified by the ticker symbol XBT.
One Bitcoin futures Contract is for 1 Bitcoin (BTC).
Forty percent margin requirements allow for leveraged trading; roughly about $8,000 to $9,000 per contract.
Below is a chart showing the Bitcoin Futures trading activity for the first day of trading, next to a 5-minute chart of the underlying Bitcoin for the same trading day.
A Futures Market for Bitcoin will have a positive effect on the cryptocurrency market in general.
First, being an underlying asset for derivative financial products listed on reputable exchanges such as the CBOE, and soon to be listed on the Chicago Mercantile Exchange (CME), will serve to legitimize Bitcoin and other cryptocurrencies in the eyes of those market participants that remain skeptical about the market.
Accessibility to the cryptocurrency market will be greatly enhanced to those institutions that are currently prohibited by government regulation from owning Bitcoin itself.
These institutions will now be able to participate in the Bitcoin market via Futures and other derivative products.
Furthermore, businesses that have avoided using Bitcoin as a form of payment for large-scale transactions that involved terms, due to the unpredictable volatility of the currency, will now be able to guarantee the value of a transaction using futures contracts to hedges against adverse market price movements, similar to the way businesses handle international transactions.
This will continue to create even more demand for Bitcoin.
Traders will now be able to hedge risk using trading strategies with combinations of Bitcoin Futures and positions of the underlying.
Being able to protect against downside risk in a Bitcoin market that is making unbelievable highs on unprecedented volatility, will ease trader’s concerns about the so called “Bubble” bursting, and Bitcoin losing all of its value overnight.
Consequently, traders will continue to enter the Bitcoin market at its highs, and the increased demand will continue to push Bitcoin even higher.
Long-term investors will also benefit from mitigating risk, and be able to create premium yielding investments using existing Bitcoin market positions that are in-the-money, along with short positions in the Futures.
We see this as the first step.
This should lead to futures contracts for other cryptocurrencies, and then eventually to Cryptocurrency Exchange Traded Funds (ETF).
We will be watching the Bitcoin Futures Market very closely.
We will be updating our subscribers as soon as we know more. For the latest updates on XBT, sign up below!
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
Image courtesy of Richard Yuan via Flickr
Bitcoin Surges After Tesla Bought $1.5 Billion Worth of BTC
The sudden rise of Bitcoin has been connected to the decision taken by the Tesla electric car company to buy $1.5 billion worth of Bitcoin.
The company explained in a filing with the Securities and Exchange Commission (SEC) that it bought Bitcoin to diversify its cash returns and more flexibility.
Musk’s Tweets also impacted Dogecoin’s price
Tesla also added that it will start accepting Bitcoin payments for all its products, although this will be based on a limited basis and applicable laws. If the company concludes and starts accepting cryptocurrency, it will make it the first major car manufacturer to accept Bitcoin payments. The company’s founder and Chief Executive Officer Elon Musk has developed an interest in Bitcoin and cryptocurrencies.
He has been tweeting severally about the viability of the Dogecoin (DOGE), which doesn’t have an important market value attached to it.
ur welcome pic.twitter.com/e2KF57KLxb
— Elon Musk (@elonmusk) February 4, 2021
Few hours after endorsing Dogecoin, the cryptocurrency rose by an impressive 50%. But regulatory authorities are still concerned about the risks in cryptocurrency investments, with several regulatory bodies warning traders and investors they could lose all their money from crypto investments.
But for Tesla, the company decides to diversify its funds and increased its cash returns. However, Tesla also warned investors about the volatility of Bitcoin’s price in its SEC filing. According to the SEC…
XNO Token of Xeno NFT Hub listed on Bithumb Korea Exchange
Hong Kong, Hong Kong, 25th January, 2021, // ChainWire //
Xeno Holdings Limited (xno.live ), a blockchain solutions company based in Hong Kong, has announced the listing of its ecosystem utility token XNO on the ‘Bithumb Korea’ cryptocurrency exchange on January 21st 2021.
Xeno NFT Hub (market.xno.live ), developed by Xeno Holdings, enables easy minting of digital items into NFTs while also providing a marketplace where anyone can securely trade NFTs.
The Xeno NFT Hub project team includes former members of the technology project Yosemite X based in San Francisco and professionals such as Gabby Dizon who is a games industry expert and NFT space influencer based in Southeast Asia.
NFT(Non-Fungible Token) technology has recently gained huge focus in the blockchain arena and beyond, making waves in the online gaming sector, the art world, and the digital copyrights industry in recent years. The strongest feature of NFTs is that “NFTs are unique digital assets that cannot be replaced or forged”. Unlike fungible tokens such as Bitcoin or Ether, NFTs are not interchangeable for other tokens of the same type but instead each NFT has a unique value and specific information that cannot be replaced. This fact makes NFTs the perfect solution to record and prove ownership of digital and real-world items like works of art, game items, limited-edition collectibles, and more.
NFTs are already being actively traded in markets globally. For…
Wisebitcoin Launches Professional-Grade Crypto Exchange
Infrastructure is developing rapidly in the cryptocurrency industry, but the recent launch of the Wisebitcoin cryptocurrency exchange is nonetheless significant in terms of the immediate value it provides to cryptocurrency users. That’s because the exchange has had a beta version available since 2018 while continuing further developments in stealth mode, and already serves over 1.2 million end users with $6+ billion in 24 hour trading volume at the time of its official launch.
In addition to the large user base and deep liquidity, Wisebitcoin also stands out by offering up to 100x leverage to margin traders, with the ability to open a long or short position in their futures market. In the current bullish environment, leverage is a key way that experienced traders increase their exposure and try to profit from volatility.
For example, if a user opened a long position on ETH on January 2nd at a price of $750, they could have greatly multiplied their profits with even a small amount of leverage such as 5x as ETH reached over $1,100 within 48 hours. A simple unleveraged position would have netted $350 in profit, but a 5x position would have netted $1,750 and a 100x leveraged position would have netted an incredible $35,000 in profits from an initial investment of just $750.
Beyond leverage, Wisebitcoin additionally offers a simple and…