Just a day after Bakkt announced the approval of its Bitcoin custody service, the CME Group announced the launch date of its Bitcoin Futures trading product on Nov. 12. This move is, according to the exchange, the reaction to the increased demand for a BTC futures trading product from institutional investors looking for options to increase their exposure to BTC in a regulated environment.
Here are the details of the CME Bitcoin Futures:
- Launch Date: January 13, 2020
- 1 BTC Contract = 5 BTC in USD
- Minimum Purchase = 5 Contracts
This means that small-time investors will not be able to use the product as one position would cost about 220.000 USD at the current price of BTC (about 8.800 USD).
What does this mean for Bitcoin?
The price of Bitcoin will likely not be affected a lot by the launch of Bitcoin Futures as the futures are settled in cash and therefore do not create actual demand for BTC. So, Bitcoin HODLers should not expect too much from the launch of CME’s Bitcoin futures. If 2017 is any indication, we might even see a drop in Bitcoin prices like with the launch of the CBOE Bitcoin Futures platform.
What do you think? Will the CME BTC Futures affect the market significantly?