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Bitcoin futures market to be launched!

Bitcoin futures market to be launched!

November 28, 2018 5:34 am,

The 2nd largest stock exchange Nasdaq is going to launch the Bitcoin futures market in 2019. Nasdaq has been cooperating with the Commodities and Future Trading Commission (CFTC) to receive regulatory approval to operate as the compliant cryptocurrency futures market operator.

BTC could suffer an 11 percent drop next week as the world’s leading cryptocurrency experiences its worst plunge since September 2017, with the asset falling below $3600. BTC is down more than 35 percent this week. The recent downturn started in mid-November when BTC fell abruptly below $6000. Since then, the world’s largest cryptocurrency continues to find new lows and has struggled to break out of the $4000 range.

Over the last week, the price of Bitcoin which was dangerously close to breaching the $4000 level, surged from $4050 to $4560 by more than 12%. On Coinbase and major fiat-to-crypto exchanges like Kraken, BTC dropped to as low as $4030 for a brief period of time and recovered to almost $4200 immediately after. It also rebounded to $4500 showing some resistance in the low $4000 region.

What impact will Nasdaq plus Bakkt have on BTC?

Bakkt, a cryptocurrency exchange built by ICE, the parent company of the New York Stock Exchange, is expected to launch its BTC futures market. The company delayed the listing of BTC futures citing an unforeseen increase in demand for its futures product. Bakkt stated that it needs additional time to prepare the infrastructure that is required to serve a large group of investors based in the US.

Currently, the demand from the institutional investors for crypto can only be evaluated through the numbers that Bakkt, Fidelity Digital Assets, Goldman Sachs and other major over the counter markets can provide.

The entrance of Nasdaq in a long-lasting bear market and downtrend suggests that the company sees sufficient institutional demand from the US market. A conglomerate in the size of Nasdaq does not allocate a large portion of its resources to develop an infrastructure for a new asset class unless it is certain that the demand for it will grow over time. Depending on the delivery of Nasdaq’s plans, by 2nd quarter of 2019, the market will have Nasdaq and NYSE, 2 largest stock exchanges, in the global market operating BTC futures market.

Bakkt physically delivers BTC to its investors and as such, it could have an impact on supply of BTC and ultimately its price. The intricacies of Nasdaq’s  plans remain unclear but the two markets could lead to an increase in additional liquidity for the asset.