New York, USA : US stock exchange, Nasdaq, plans to introduce bitcoin cryptocurrency futures contract in the first half of 2018, according to media reports on Wednesday. Nasdaq’s contract on bitcoin would be traded on Nasdaq Futures (NFX), a marketplace, established in 2015 and until now dealing with the energy sector.
Additionally, broker Cantor Fitzgerald, a global financial services firm, is also reportedly planning to launch its bitcoin derivatives, which would provide traders with a hedging alternative that swaps bitcoin prices up to three months out with protection of their losses in case the cryptocurrency rockets above $15,000 or below $5,000.
The introduction of bitcoin futures would reportedly be a step toward the maturity of the young cryptocurrency, since it would make the bitcoin trade easier both for major banks and private investors. However, financial institutions are avoiding dealing with bitcoin due to its notorious volatility and associations with illegal activity, the newspaper added.
Since the beginning of the year, Bitcoin has risen more than 11-fold, and its capitalization now exceeds $182 billion. Meanwhile, the total capitalization of the market, as of November 29, exceeded $330 billion.
Experts associate the rise of bitcoin with the influx of new money to the market and with the expectations of the prompt launch of futures for this cryptocurrency at the Chicago CME Group.
The price of Bitcoin surged by US$1000 on November 29 hitting a high-point of US$11,150. The US Federal Reserve and the Bank of England, seeking to calm fears that the digital currency might destabilize the global financial system said it is too small to have such an effect but warned investors to “do their homework” if they plan to invest.
As well as being known for its profitability, the Bitcoin has shown itself to be extremely volatile. On the same day as hitting its new high, Bitcoin fell back down to US$10,500.
The online currency has witnessed an incredible 1000 percent increase in value since the beginning of 2017 when it was worth US$1,000.
It’s previous high was reached in 2013 at US$1,023.
Bitcoin, is one of the most popular cryptocurrencies, which allows users to make secure payments for goods and services online. It was introduced in 2009 – as open-source software in 2009 by an unknown person or group under the name of Satoshi Nakamoto – to serve as an independent alternative to government-backed currencies.
The first international decentralized digital currency, Bitcoin works without a single administrator or central repository, while transactions between people are made directly without an intermediary.