Bitcoin has certainly made its name as an investable asset with its rapid price gains, and volatile swings. For most investors, the mere fact of holding onto the cryptocurrency and treating it like gold is enough, but there is a change in the air as more institutional investors enter the space and bring with them traditional tools.
One such tool that has made a real splash in the Bitcoin market is that of futures trading. Futures trading involves agreements to buy or sell a specific amount of a commodity at a specific date for a set price. This is especially attractive in Bitcoin trading due to the notoriously wild swings.
In fact, Bitcoin has even been garnering interest from institutional investment houses when it comes to futures trading. CME has made some big strides in its offering of Bitcoin futures, as has Bakkt with its innovative physically settled contracts.
However, as these markets continue to grow and gain attention, there is a belief from The chair of the US Commodities and Futures Trading Commission (CFTC) that Ethereum futures will be the next big thing.
Leading the way
When it comes to futures trading in Bitcoin, there is a strong presence from the US, however, a lot of action is also coming from Asian traders on platforms like Huobi and Binance. Yet, for the CFTC, there is a desire to be a leader in this space.
“I want the United States of America to lead in this,” Heath Tarbert said, mentioning not only digital assets but also blockchain technology.
“Certainly, we’ve seen Bitcoin futures, both cash-settled as well as physically delivered. My guess is we’re going to see Ether futures as well, and as things start to migrate into the commodities space, we’ll see even more.”
Ether futures trading would certainly be a boost to the trading space around cryptocurrencies as it would open up the market and allow for investors to diversify further within the industry. That being said, Ethereum is one of the altcoins that are known to follow Bitcoin’s general trajectory quite well.
When will we see ETFs?
The next big event on the horizon when it comes to institutional investing products is for a Bitcoin ETF. However, this still looks to be a long way off – yet, not impossible. Bitcoin ETFs have been something members of the crypto community have been looking to since 2016, but they continue to be halted by the SEC at every attempt.
