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80. CME Bitcoin Futures (Published: 23rd Nov, 2017)
Announced on 31 Oct 2017, the Chicago Mercantile Exchange (CME) is launching a Bitcoin futures by the end of this year. Below are some of the specs for the contract:

Contract size

5 BTC

Price Quotation

BTC per USD

Trading hours

CME Globex:

Sunday - Friday 6:00 p.m. - 5:00 p.m. (5:00 p.m. - 4:00 p.m. CT) with 15-minute trading halt Monday – Friday 3:15 p.m. - 3:30 p.m.CT and a 60-minute break each day beginning at 5:00 p.m. (4:00 p.m. CT)

CME ClearPort:

Sunday - Friday 6:00 p.m. - 5:00 p.m. (5:00 p.m. - 4:00 p.m. CT) with a 60-minute break each day beginning at 5:00 p.m. (4:00 p.m. CT)

Minimum Price Fluctuation

$5.00 per bitcoin = $25.00

Listed Contracts

Monthly contracts listed for the nearest 2 months in the March quarterly cycle (Mar, Jun, Sep, Dec) plus the nearest 2 serial months not in the March quarterly cycle.

Settlement Method

Financially Settled

Termination Of Trading

Trading terminates at 4:00 p.m. London time on the last Friday of the contract month. If that day is not a business day in both the UK and the US, trading terminates on the preceding day that is a business day for both the UK and the US.

The contract will be settled based on the CME CF Bitcoin Reference Rate (BRR), which retrieves price data from GDAX, Bitstamp, itBit, Kraken, which are subjected to addition or deletion with certain criteria. The launch date is not yet released but is expected to be in December this year.

A Bitcoin futures on a regulated exchange will surely attract institutional investors to participate in the market, providing good liquidity and wider adoption. Also, this contract is settled in USD, which is different from the existing BTC-denominated futures in other exchanges.This will open up new opportunity for both hedging and speculating. However, the contract size is 5 BTC, which is equivalent to $40,000 when the price is $8000. A proper risk management on the margin account is essential in order not to incur a huge loss in the trading.

For miners, they can use this futures to hedge against Bitcoin exchange rate risk by shorting it. For institutional investors, they can have exposure in the Bitcoin market without dealing with the technology. For traders, they can study the pricing model and relationship with other Bitcoin derivatives/ spot market to explore arbitrage opportunities. This futures can expand the market effectively and hence it is recommended to study carefully about its details for new opportunities.



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