The Impact Of Bitcoin Futures On Cryptocurrencies

Since the CME Group’s Sunday afternoon launch of Bitcoin (BTC) futures, it has been an extremely active period on the cryptocurrency front. After an initial run at $20,000, BTC has pulled back to nearly $17,000 on today’s cash and futures markets.

Volumes on both the CME and Cboe January BTC futures are at relatively low levels. The limited volumes indicate that these markets are in the developmental stages. Whether or not they catch on among the trading public remains to be seen. However, the notion of Bitcoin on the prominent U.S. futures markets has legitimized the cryptocurrency atmosphere.

Perhaps the largest beneficiaries fo standardized BTC futures may be the leading “altcoins.” The performance metrics for the past month are staggering:

Product                          Gain (Approx.)

Bitcoin Cash                   250%

Ethereum                        120%

Litecoin                           340%

For a one month period, these types of gains are hard to find a valid comparison. Pricing volatility remains a staple of these markets. Thus far, it has been the bulls that are applying the pressure as we near 2018.

Overview

While many experts debate the actual impact of the Cboe and CME’s BTC futures offerings on the cryptocurrency markets, they certainly did not hurt value! In fact, there is talk that standardized futures contracts facing a variety of cryptocurrency products may be coming to exchanges sooner rather than later.

As of this writing, there are a several long-term cryptocurrency trades over on the signals page. If you are interested in these markets, engaging them with a structured approach is one way to limit the negative impacts of extreme volatility and maximize their potential.

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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