On Tuesday, the Chicago Mercantile Exchange (CME Group Inc.) declared it will start offering Bitcoin futures in Q4 2017 at the soonest and Q1 2018 at the latest.
Given that the CME is the “the world’s largest options and futures exchange” (per Wikipedia), this development could prove explosive when it comes to generating institutional interest in speculating on Bitcoin and cryptocurrencies in general in extension.
In a statement to the press, CME Group CEO and Chairman Terry Duffy said it’s all about meeting surging client demand for cryptocurrencies.
“Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract […] As the world’s largest regulated FX marketplace, CME Group is the natural home for this new vehicle that will provide investors with transparency, price discovery, and risk transfer capabilities.”
This announcement bodes well for the mid- and long-term pricing of Bitcoin, as mainstream institutional investments in BTC futures could obviously cause the current #1 crypto’s price to skyrocket in the next 5 to 10 years.
Indeed, as such futures help to stabilize BTC as an asset class, so too will the coin’s price likely stabilize at new all-time highs over and over and over again.
— CMEGroup (@CMEGroup) October 31, 2017
As Tom Lee of Fundstrat recently remarked, the potential for Bitcoin reaching five digits by 2022 will largely be made possible by the financial boosts these futures can provide.
BlockTower Capital CIO Air Paul, for one, is pumped about the ramifications CME’s move will have for the space.
“[R]egulated bitcoin derivatives will bring a great deal of liquidity and legitimacy to the cryptocurrency ecosystem.”
Ethereum futures coming soon, too
The U.S. Commodity Futures Trading Commission (CFTC) gave LedgerX a specialized license to create the first federally-approved clearing house for “derivatives contracts settling in digital currencies.”
Naturally, Ledger X is aiming to offer BTC options contracts first, but they’re looking to follow up with Ethereum futures directly thereafter.
This means Ethereum enthusiasts can expect the same institutional price pressure that Bitcoin’s seemingly going to be getting first-mover status on in the mid- to long-term.
But it’s a whole lot better being in second than not being in the running at all when it comes to be listed as a settling option on major, voluminous financial exchanges.
TLDR: The Chicago Mercantile Exchange is opening up Bitcoin Futures in Q4 2017, which could cause a flood of institutional funds speculating on the crypto space.