Parabolic Growth Is Coming for BTC Futures
BTC futures are often met with mixed reactions.
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BTC futures are often met with mixed reactions. After all, it was almost entirely after their introduction into the space that the price of BTC crashed by epic proportions. With a purely speculative user base, BTC futures traders, unlike diehard HODLers, aren’t deterred by downswings in bitcoin’s price. They can still make money by shorting BTC without ever having to take physical delivery. All that is about to change.
Parabolic Growth Is Coming for BTC Futures
One has to wonder whether CBOE is kicking itself in the foot for withdrawing its BTF futures contracts. But then again, back in March, interest in crypto derivatives seemed to have cooled. Bitcoin’s price was still languishing in the $3,000s for most of that month. And CBOE’s offering lagged behind rival CME, which repeatedly saw higher trading volume–its BTC futures 30-day average was over four times larger.
Then, suddenly, things began to change. BTC price went on a massive tear, institutional interest in the space exploded, and crypto derivatives started becoming big business again. More players entered the space and even exchanges like OKEx started hitting records, toppling the mighty BitMEX in 24-hour trading volume.
This summer, CME registered record month upon record month and BitMEX hit a new all-time high for BTC futures trading at over $16 billion in 24 hours. Just recently, the world’s largest crypto exchange Binance also entered the space hitting a massive $150 million in its debut beta futures platform.
BitMEX may still dominate the retail trader market but that market is getting bigger all the time with demand coming from both retail traders and institutions. Just last week, CME filed a petition to the CFTC to double its BTC futures offering. Crypto derivatives can only go one direction from here–and that is decidedly upward.
The Long-Awaited Bakkt Launch in the BTC Futures Space
Of course, arguably the most important event in the BTC futures space so far took place today. The long-awaited Bakkt unleashed its physically-settled BTC futures product. Since the entrance of Bakkt into the space is widely considered extremely bullish for Bitcoin overall, it’s curious that BTC price failed to respond positively upon Bakkt’s opening.
It may be the case that Bakkt doesn’t send the price of BTC or the markets skyrocketing as many people hope. However, it is still an epic legitimization for the world’s first cryptocurrency being given the seal of approval by the New York Stock Exchange.
Moreover, providing physically-settled BTC contracts is an industry first. This will mean that futures traders on Bakkt must acquire or take delivery of the actual asset rather than the cash difference on current futures platforms.
More demand for physically-settled BTC futures means more demand for BTC–although that demand is yet to be established. Bakkt’s entrance may simply help Bitcoin find its market price or it may onboard more institutions and send the price soaring, either way, another major player in this area will only grow the maturing space further.
A Futures Market for Short-Term Traders
Of course, there are more innovations set to happen in BTC futures this year–one of which is commission-free trading. Digitex Futures has been making noise about allowing trades with zero fees since our ICO in January 2018 and our project is finally about to come to fruition!
On November 30, we’ll be opening up our public testnet with a BTCUSD perpetual swap contract allowing traders to trade without paying a single commission. This will be a huge incentive for short-term traders and scalpers.
While low commission fees don’t phase many traders placing large trades and taking open positions for a long time, scalpers aim to take advantage of even the smallest price fluctuations. This is a trading strategy that builds up a lot of small profits over time. However, it is currently almost impossible to be successful at it with the existing fee-charging model on every exchange in the market.
By removing the commissions, we’re looking to create highly active and liquid markets with tight bid-ask spreads. Scalpers will be able to trade BTC futures without ceding a chunk of their winnings to the exchange at last! Our unique revenue model hasn’t been tried yet and it is certain to create even more activity in the BTC futures market!
Wrapping It Up
From more players in the market to existing exchanges doubling their capacity, different types of BTC futures contracts and commission-free trading coming soon, it’s time to buckle up. BTC futures is set to go parabolic.
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