Bitcoin Futures? Meh...the real deal is ETF's!
Later today, futures trading opens. But it doesn't really matter.
Well, it kind of matters. But not directly. Future contracts are paid out in U.S. funds, not in Bitcoin, so the market influence of futures will strictly be psychological.
If you believe in the adage, "Buy the rumor, sell the news", you would expect Bitcoin to be due for a big correction once futures launch. This could well be the case. It's important to think long-term here.
Futures exchanges, once launched all over the United States over the coming weeks and months, will remove the stigma of Bitcoin as a dark web, nefarious tool (in reality, good old American cash is used far more for crime and terrorism than Bitcoin, but that's beside the point!). Once this dark reputation comes to light, Bitcoin will be seen as a legitimate tool of value transaction and storage. It is at this point in time, that we may see an explosive growth in Bitcoin - when ETF's are launched.
ETF's - or exchange-traded funds - allow large-scale investment in the actual Bitcoin through the actions of a buying and selling entity. An investor could go to his or her broker and order Bitcoin ETF's to be added to their investment portfolio. ETF's were denied for Bitcoin in the past due to its negative reputation as a money-laundering tool and dark web currency. This reputation is about to change. The approval of Bitcoin ETF's will bring about a large influx of crypto-buyers, unlike anything we have ever seen. When Bitcoin as an asset is available on a wide-scale for retirement investment, pensions, and other investment portfolios, it will grow massively, because ETF's will involve buying and selling Bitcoin itself, rather than making side-bets in USD cash.
So don't fret too much if the side-bets on futures today start a drop in Bitcoin's value. It is, in reality, quite likely that the price will drop for a while - perhaps for months - since so many buyers entered the market on excitement of this new development. Hang on to your Bitcoin and wait for the real show; when ETF's are finally allowed.
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Thats good analysis and I do agree with you.
If bitcoin is too fall or hold steady for a couple months, what impact do ypu think this will have on alt coins?
I believe it should increase their value as more people look for gains on them.
I agree - I think we will likely see a move toward Ethereum and Litecoin over the coming months as Bitcoin's price should cool for a while. The genie is out of the bottle and people are going to want to add to their crypto-portfolio. Litecoin and Ethereum are easy to buy with simple apps like Coinbase. Just my opinion.
Yeah, the volume moving through the market is going to be crazy.
I just see today's future trading announcement as a signal to other businesses to start adopting block-chain technology which will slowly start it moving to the main stream.
Of course, in time, this will lead to the development of products that will actually increase BTC trading volume such as ETFs etc.
But I think, Bitcoins future is going to be a little bit calmer in future and other competitors are going to close gap and increase in significance next year.
It's true, it will steady over time -- but I think it will have tremendous growing pains before reaching that level of stability.
I suspect that as well.
I think that for now other coins like XRP and XLM will take the lime light.
Bitcoin just seems really shaky at the moment.
Bitcoin Cash seems promising but we will have to see what the future holds