Bitcoin Futures Could Open the Floodgates for Institutional Investors

Bitcoin is spiking to a report after CME Group Inc. mentioned it’ s planning to launch bitcoin futures as the move could open up the floodgates of investors who’ve been standing on the sidelines as bitcoin soared over 500 percent this season.

The cryptocurrency jumped just as much as 5. 2 percent to $6, 416. 39 after the CME stated it will start offering trading the particular derivatives in the fourth quarter. Futures will be settled in cash depending on a bitcoin index that CME started calculating in November.  

The proceed comes after the  Chicago Board Choices Exchange said in August it’ s exploring bitcoin derivatives opportunities, as the Commodity Futures Trading Commission within July registered cryptocurrency investing platform LedgerX as the first government regulated cryptocurrency derivatives exchange plus clearinghouse.

With bitcoin futures getting mainstream, the next logical step appears to be a bitcoin exchange-traded fund, since the Securities and Exchange Commission experienced cited the lack of derivatives as one of the causes of rejecting approval of the funds. ETFs and derivatives are likely to make bitcoin trading a lot more palatable for hedge funds and mutual funds, since the instruments will allow them to hedge for your digital asset’ s volatility and prevent some of the hassles of investing in bitcoin directly.