Major investment firms are now offering Bitcoin futures

By Eric Brackett Updated October 28, 2020

bitcoin future exchanges coming soon bitcoins — Steve Garfield/Flickr

Bitcoin has seen rapid growth this past year, but the virtual currency’s growth has increased more than its monetary value. It has also increased the coin’s credibility as an investment. Bearing testament to this is the fact that major investment firms have begun to offer Bitcoin future exchanges, as Business Insider reported earlier this week.

The first of these firms is the Chicago-based Cboe Global Market, which launched its exchange on December 10. One of the company’s main rivals, CME Group, is preparing to offer its own future exchanges on the 18th. Nasdaq is also getting ready to launch an exchange, but it won’t be ready until the second half of 2018.

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Reuters has reported that TD Ameritrade is now getting on the Bitcoin action as well, and will allow its clients to take part in Bitcoin futures on December 18. The trades will be conducted using the Cboe Futures Exchange.

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Futures are basically a form of gambling where two or more parties place a bet on the price of the certain item at some point in the future. The concept has been around for more than a 100 years, and is normally handled by professional firms and investors. The winner of the “bet” is then paid either in cash or in the form of the item that is being speculated upon. In the case of Cboe Global Market’s Bitcoin futures, the winner is paid in cash rather than Bitcoins.

Those who are interested in getting involved in the Bitcoin futures market should know that, due to the instability of the Bitcoin marketplace, the group is requiring all investors to have at least 44 percent of the settlement price set aside for the bet. This practice is fairly common in future exchanges, but the percentage normally hovers around 10 percent.

Instability is certainly one of the biggest fears that investors have regarding Bitcoin. Many believe that the market isn’t mature enough to support futures exchanges, and the price of Bitcoin has experienced some rather rapid fluctuations in recent months. Currently, the coin is valued at over $$19,265.26, but it should be noted that it went as high as $19,000 before falling back down to the $15,000 range in the recent past.

While the risks are blatantly apparent, there are many who excited by the prospect of major investment firms getting involved in Bitcoin, as it might open new doors for other cryptocurrencies.

Update: TD Ameritrade will also offer support for Bitcoin futures.

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Bitcoin's white paper was originally released in 2008, with the first Bitcoin being mined in 2009. Today you can buy, sell, and trade Bitcoin on a variety of different exchanges and with millions of individuals privately, all over the world.