The bitcoin price has surpassed the $19,600 mark and is rapidly surging towards $20,000. The market has demonstrated optimism towards CME’s bitcoin futures listing tomorrow, on December 17.
The global finance industry and bitcoin market are highly anticipating the launch of CME Group’s bitcoin futures on December 18, especially after the successful debut of bitcoin futures on the Chicago Board Options Exchange (CBOE).
Purely based on daily trading volume, CBOE and CME will not surpass that of cryptocurrency exchanges and trading platforms in the short to mid-term. Over the past few days, the daily trading volume of bitcoin across major exchanges in regions including the US, Japan, and South Korea have reached $17 billion, a daily trading volume that is larger than most stock markets.
But, CBOE and CME enable institutional investors and retail traders to invest large sums of institutional money and capital in bitcoin. More importantly, upon the debut of bitcoin futures on the CME exchange, leading investment banks Goldman Sachs and JPMorgan are set to clear bitcoin futures on behalf of their clients.
Earlier this month, JPMorgan global markets strategist Nikolaos Panigirtzoglou, expressed his optimism towards the launch of CME’s bitcoin futures exchange. Panigirtzoglou emphasized that bitcoin futures will provide the cryptocurrency with more legitimacy and further validate it as an emerging asset class.
“The prospective launch of bitcoin futures contracts by established exchanges in particular has the potential to add legitimacy and thus increase the appeal of the cryptocurrency market to both retail and institutional investors,” said Panigirtzoglou.
He added that in the long-term, regulated instruments such as futures contracts will allow bitcoin to compete against traditional asset classes such as gold. Panigirtzoglou explained, “the value of this new asset class is a function of the breadth of its acceptance as a store of wealth and as a means of payment and simply judging by other stores of wealth such as gold, cryptocurrencies have the potential to grow further from here.”
Major hedge funds, investment firms, and financial institutions including Man Group, Goldman Sachs, and JPMorgan have anticipated the launch of CME since October and are committed to clearing bitcoin trades on behalf of their clients, investors, and customers.
Already, the price of bitcoin is nearing the $20,000 mark without a significant amount of institutional money invested in the bitcoin market. The daily trading volume of bitcoin is nearing the $20 billion without major regions such as India and South Korea properly regulated.
The massive inflow of tens of billions in institutional money in the upcoming months is expected to lead to a short and mid-term price surge. As Bitfury vice chairman George Kikvadze previously explained, it is more difficult for large-scale hedge funds and investment firms to commit to a certain asset class if it does not have sufficient liquidity and robust infrastructure surrounding it.
Bitcoin is beginning to see an increase and improvement of trading infrastructure in both the cryptocurrency market and traditional finance sector.
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Last modified: May 20, 2020 9:16 PM UTC