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With CME’s December Futures Launch, Can Bitcoin Price Hit $10,000 This Year?

Last Updated March 4, 2021 5:01 PM
Joseph Young
Last Updated March 4, 2021 5:01 PM

CME Group, the largest options exchange in the global finance sector, has announced December 10 as the official launch date for its bitcoin futures trading platform. Analysts expect the bitcoin price to surpass $10,000 upon the launch of CME’s bitcoin futures exchange.

Earlier this month, several highly regarded financial analysts including RT’s Max Keiser and billionaire hedge fund investor Mike Novogratz have predicted the price of bitcoin to achieve the $10,000 mark in the short-term.

First LedgerX Option Pegs Bitcoin Price at $10,000

This week, LedgerX, the US Commodities and Futures Trading Commission (CFTC)-approved bitcoin derivatives, options, and futures exchange, processed its first bitcoin options contract. The buyer pegged its option contract at $10,000, which would allow the buyer to profit from the bitcoin investment only if the price of bitcoin achieves the $10,000 mark by December 28.

Futures and options exchanges operated by LedgerX, CME Group, and CBOE are only utilized by accredited institutional investors that are not allowed to invest directly in bitcoin. As such, the majority of options contracts as the abovementioned contract are made by large-scale retail investors, that truly believe the price of bitcoin can reach $10,000 in the short-term.

In an interview with Coindesk, LedgerX CEO Paul Chou stated: 

“There will be, I expect, a lot more trades down the line. This is the first one, but it at least gives you the first guess from different institutional traders as to what bitcoin’s dynamics will look like from now until 2018.”

The market has become extremely confident in the short and mid-term future of bitcoin given that some of the world’s largest hedge funds including the $95 billion Man Group have announced their official plans to invest in bitcoin upon the launch of the CME bitcoin futures exchange by December 10.

Coinbase CEO Brian Armstrong revealed that approximately $10 billion in institutional money is awaiting to be invested in bitcoin and other cryptocurrencies.

“Over 100 hedge funds have been created in the past year exclusively to trade digital currency. An even greater number of traditional institutional investors are starting to look at trading digital assets (including family offices, sovereign wealth funds, traditional hedge funds, and more). By some estimates there is $10B of institutional money waiting on the sidelines to invest in digital currency today,” wrote  Armstrong.

To address the rapidly growing demand for bitcoin from the traditional financial market and institutional investors that can no longer be dismissed, independent bitcoin brokerages and exchanges such as Coinbase have launched custodial platforms targeted at institutional and retail investors.

Likelihood of $10,000 Short-Term Target

The price of bitcoin has already surpassed the $8,000 mark and is building upward momentum to achieve new highs in the short-term. If large-scale hedge funds and institutional investors invest in bitcoin in December as planned, the price of bitcoin will likely surge towards $10,000.

Sudden flow of tens of billions of dollars into the bitcoin and cryptocurrency markets will likely trigger a domino effect on most major bitcoin exchanges, causing the daily trading volume of bitcoin to surge and the value of bitcoin to increase exponentially.

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