Despite the rapidly descending price of Bitcoin (BTC) and the crypto market crash, the world’s second largest stock exchange, Nasdaq, is planning to launch Bitcoin futures in 2019.
Bloomberg reports Nasdaq has been working closely with the Commodities Futures Trading Commission (CFTC), to receive regulatory approval for their proposed Bitcoin futures launch in the first quarter of 2019.
The report read:
Nasdaq has been working to satisfy the concerns of the U.S.’s main swaps regulator, the Commodity Futures Trading Commission, before launching the contracts, the people said. The New York exchange operator, which was first reported to be eyeing Bitcoin futures last year, wants to allow trading in the first quarter of 2019, one of the people said.
Bitcoin Futures & Their Impact on the Market
Launched by institutional investment firms, Bitcoin futures provide professional and institutional investors with a centralized marketplace that allows participants to speculate on the future price movements of Bitcoin (BTC).
Participants agree to take either a long “buy” or short “sell” position at a specific future date at a specific price. Once entering a contract, the participants must buy or sell at the agreed-upon price, regardless of what the market price is at the time of the contract execution date.
With Bitcoin futures, participants can speculate on the price of Bitcoin without owning Bitcoin. However, this depends on the Bitcoin futures trading platform. For example, Bakkt will enable users to speculate on physically settled Bitcoin futures when they launch in January 2019.
The Nasdaq Bitcoin futures are not the first to hit the cryptocurrency market, and probably won’t be the last.
Back in December 2017, at the height of the cryptocurrency market, the CBOE Global Markets Inc. and CME Group Inc. launched their Bitcoin futures contracts. Shortly after, the price of Bitcoin continued to climb and reached a new high of nearly $20,000 before plummeting down to the $4,000 levels we’re at recently.
Now, with Nasdaq’s Bitcoin futures set to launch in Q1 2019, it appears they are launching at the bottom of the cryptocurrency market rather than the top, as seen before.
How Will This Affect the Crypto Market?
Many people in the industry including Tom Lee of Fundstrat, are very bullish on institutions introducing Bitcoin futures. Back in October, Lee touted that Bakkt could be a catalyst for the next bull run for cryptocurrencies.
Q1 2019 is now shaping up to be an interesting one, with the Bakkt launch scheduled to occur in late January 2019 as well.
With both Bakkt and Nasdaq Bitcoin futures set to launch in Q1 2019, Lee and others have plenty of reasons to be bullish on Bitcoin. Especially considering the fact we may have already reached or are close to the Bitcoin price bottom.
What effect do you think the Nasdaq Bitcoin futures will have on the price of Bitcoin? Will it spur a new bull run that surpasses previous all-time highs? Let us know in the comment section below.