Futures and Bitcoin

NASDAQ Bitcoin Futures

NASDAQ Bitcoin Futures

Nasdaq is opening their own futures market for cryptocurrency which shouldn’t come as a surprise. NASDAQ’s CEO has had a positive view of the crypto space for at least a year. Understanding Bitcoin is in an infantile state and until it reaches maturity we will continue to see the volatility we’ve seen in 2018. Even in Bitcoins infantile stage, it has outperformed all other assets to date. From its humble 2009 beginnings at less than a dollar per Bitcoin to today’s value of nearly four thousand dollars per Bitcoin. NASDAQ will open the futures market in Q1 of 2019 regardless of bear or bull markets.

NASDAQ’s Vice President of Media announced to Express that they’ve had their eye on crypto and blockchain for years. They are not jumping on the bandwagon due to lasts years super bull. They’ve been planning entry for some time now and barring CFCT hold-ups will start offering futures contracts in a few months.

What is a Futures Contract?

Futures are contracts that receive their value based on an overall performance of an asset. That asset can be anything from oil to corn. Futures contracts are simply agreements to sell or buy an asset at a price that has already been agreed upon, at some time in the future. Futures contracts are often used for security or speculation.
In the case of Bitcoin futures, if an investor believes the price of Bitcoin will be elevated to a certain price in the future, that investor can use this prediction to their advantage. The investor can sign a futures contract for Bitcoin at a lower price than their prediction, then when the price is higher than their futures contract price agreement, they can profit from the price difference.
Futures are appealing to investors for their leverage, meaning investors can trade on multiple Bitcoins while only actually paying for a portion of them. While leverage is a benefit, it can also be dire if played wrong. In the same way that you can amplify your profit potential betting on futures, you can lose a large amount very quickly.