Bitcoin’s Future is looking bright
The Bright Looking Future of Bitcoin
Despite the fact that Bitcoin is possibly the most popular cryptocurrency for the moment, and Bitcoin’s future is coming brighter, it may be risky investing in it. A major reason for this assertion is the fact that Bitcoin is currently trading at about $7,900, which makes it seemingly unaffordable for investors hoping to invest in it. Another key reason is its market volatility.
Read about the latest rise in Bitcoin Price
Since the beginning of this year, Bitcoin has experienced a growth of about 500 percent. Though this is quite remarkable yet such a sharp growth just within a short time may keep sceptics wondering when the other shoe will drop.
To think of it, back in 2010, bitcoin was not even worth one. But now, the Bitcoin market capitalization is in excess of $160 billion. There is an increase in the use of the cryptocurrency which has subsequently increased its transaction values.
Bitcoin has presented such a lucrative, bright, and potential future that has been so enticing that even some key financial institutions can’t just resist the bite. One of these institutions is taking the drastic steps to transform Bitcoin’s future into a legitimate financial asset that can be used all over the real world.
The world’s biggest futures exchange, CME, has declared that it will be launching a Bitcoin futures contract by the end of this year. But how would these futures contracts allow ordinary investors to capitalize on Bitcoin? By then both market volatility risk and counterparty risk would have been greatly reduced if not eliminated. The future contract will work in a way that investors would bet on the future price of Bitcoin, set for a future date. When the future date arrives and the Bitcoin market value is actually higher, then the investor will pocket the difference.
Read more about CME’s futures contract for bitcoin.
In this system, investors do not actually need to buy Bitcoin, No, they only need to essentially make speculations on its price. However, bitcoin holder will be put at the mercy of the markets, which is unpredictable when it comes to cryptocurrencies. Additionally, creating these futures contracts will also enable the creation of Bitcoin ETFs, which are likely to be backed by these contracts.
Should this happen, an indisputable risk is that the ease of investing in bitcoin would cause a rise in Bitcoin price. On the other hand, it will also cause the market to create more products and technology that will easily integrate cryptocurrencies into our daily lives.