Bitcoin Futures Launch Creates Uncertainty for Investors After an Intense Week

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Sunday opens a new door for bitcoin at 6 pm local time Chicago as future trades are going to start trading on the Chicago exchange. This is the newest method to obtain bitcoin.

This launch of the futures exchange has given the cryptocurrency a new kick to its already astounding increase in value in a very short period of time. It has almost doubled its value in December alone, but it lost a great deal of value on Friday after a surge up to $16,600 just days before.

Bitcoin remained up on Sunday about three percent of its value that was lost Friday. While many individuals are excited to see a way Bitcoin in a regulated manner, others feel that the risk is too great. It can underpin trades and lead to devastating results for investors in the market.

The futures that are going to be sold as cash-settled contracts that determine the price of bitcoin on the Gemini exchange, operated by both Cameron and Tyler Winklevoss, entrepreneurs in the virtual currency world. Randy Frederick, vice-president at Charles Schwab for trading and derivatives, based out of Austin, attributes the recent surge of Bitcoin due to “optimism ahead of the futures launch.”

Fans of the cryptocurrency have been excited about being able to invest in a regulated product without needing to create an account for a digital wallet. The exchanges aren’t without their own complications. Cybersecurity and fraud issued have been impacting it in recent months. Frederick stated that the market is going to be open to a lot of new people not currently in the bitcoin market.

The launch is receiving mixed signals from brokerages and banks across the world. Charles Schwab and TD Ameritrade have said that for now, they are not allowing trading of bitcoin futures. Larger banks in the United States such as Citigroup and JP Morgan Chase, will not make bitcoin trades immediate for clients as reported by the Financial Times.

Experts predict that, according to economic theory, volatility in price should decrease as more institutions get involved in the exchange. This might not stabilize until they’ve been in the trade for at least a few weeks. It remains a mystery as to how the opening of the futures is going to impact the value of bitcoin given that it is a new form of asset and it ventures into unknown territory.

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