Today, December 18th, 2017, let it be marked as the day "Bitcoin Futures" arrived. The new product brought to you by CME Group and it's currently live.
CME's website features the commodity on its front page and trading has begun.
This marks the first true step for mainstream adoption which has really just begun recently within the past several weeks.
Most people on earth are just learning about or getting interested in what bitcoin and virtual currency in general is about. In all honesty, as far as mainstream goes, bitcoin is still in its infancy despite it's 8 year history and today's price will be thought of as rock-bottom in the future as most of the planets population will know $18,800 on December 18th (rather fitting) as the beginning base floor.
CMO and Nasdaq have product offering coming soon as well making bitcoin investments more obtainable to the masses. This means more money can be invested into the technology easier which will in turn undoubtedly push the price up.
However, as we have continued to warn those investing, do so responsibly because it is ultimately a long hold for true profit short of professional day trading.
What is a Future?A future is a agreement between a buyer and seller to trade at a set price in the future. For example, the futures index for bitcoin on CME was around $17,900 for July of 2018 yesterday. One buyer is willing to buy $17,900 for a bitcoin on July 18th, 2018 whereas another is willing to sell a bitcoin for $17,900 on July 18th, 2018.
Why on Earth Would Anyone Do This?If the price goes up or remains the same, assuming the seller holding the bitcoin obtained it for less than $17,900 then everybody wins or at least breaks even. If the price goes down, the seller still gets the price of $17,900 from the buyer who then get the bitcoin regardless of it's price. If bitcoin were to drop to $15,000, the buyer loses $2,900 whereas the seller loses nothing. Likewise bitcoin may go up to $35,000 in which case the buyer get the same bitcoin for the $17,900 that the seller receives.
It this a good idea? In general its a gamble when trading futures. Bitcoin is no exception to that rule.
That said, it may be more appealing that peanuts or coffee in that market. Regardless, it's a big step for bitcoin as it continues to catapult into the mainstream.
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