Bitcoin trading is heading towards the mainstream of financial trading. A US regulator has stated that two exchanges would be permitted to commence trading in Bitcoin related financial contracts. The two exchanges are CBOE Global Markets and CME Group which will offer Bitcoin futures to investors from December on.
Bitcoin Dropped 20% In a Day
This is one step for Bitcoin towards the financial mainstream. It may have resulted in a boost for Bitcoin to a record $11,400 Wednesday. However, the cryptocurrency dropped 20% over the following 24 hours. It reached its high, then dropped rapidly in value.
What this indicates is that Bitcoin is not a stable cryptocurrency. However, the Commodity Futures Trading Commission (CFTC) announced that it will allow Bitcoin futures to be traded this was regarded as a watershed for the Bitcoin currency. What that mean is that investors will be enabled to purchase and sell “future” contracts in Bitcoins. For example, investors can now buy Bitcoins in three months time at a price agreed today.
Bitcoin Trading Available on CME Globex From Mid-December
According to CME Group, Bitcoin trading would be available on its trading platform (CME Globex) form December 18th. That said, enhanced risk management safeguards would be put in place by CME and CBOE as protection against volatility. This protection may not be enough.
Bitcoin’s rapid rise from under $800 in December last year to over $11,000 last week on Coindesk has raised fears among many that this bubble could burst quite quickly. That could happen as early as next year. However many bankers believe the cryptocurrency to be a fraud, even though most do not.
Bitcoin Trading Rising
Others are now questioning whether or not Bitcoin is any kind of currency at all. It seems to many that it has been created simply for trading. The Bitcoin trading market vacillates with the wind but seems to be on the rise for now.
Although the recent bitcoin trading trend has been upwards, there is little evidence of the cryptocurrency being used to actually purchase something. Time will tell if this cryptocurrency is here for the long haul or was created simply to make money.
