What you need to know about the future(s) of Bitcoin
Even if you’ve just dipped your little toe into the ever-deepening pool that is the crypto industry, you would have heard about Bitcoin. It’s the biggest and most popular virtual currency, with its reach widening every day. It’s also the most expensive.
Trading in this fast-growing currency can quickly burn a hole in your pocket. In addition, the unpredictable market makes investing risky. However, two of the biggest exchange companies in the US hope to alleviate most of your fears by launching Bitcoin futures products.
On Tuesday, CME announced their aim to have their Bitcoin futures product released before the end of this year. The company previously launched a CME CF Bitcoin Reference Rate (BRR), and the futures will be based off of this rate.
The second company, Cboe, is also aiming to launch their contracts by the end of this year.
These announcements saw a sharp increase in the currency’s price, with it currently trading at just under $7000. In fact, Bitcoin’s price has increased 500% since the beginning of 2017, gaining the attention of both Wall Street and Main Street.
If you’re not sure, let’s take a look at what futures actually mean. As the name suggests, investors will be able to bet on the future price of a commodity, or on Bitcoin in this case. If the currency is trading at $7000, an investor will buy it for $8000 as they think that is what the future price will be. If however it increases to $10000, the investor will get the $2000 difference.
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