How can futures influence the price of bitcoin and the crypto industry in general?
Many experts believe that the emergence of bitcoin futures in the traditional market contributes to the mass adoption and popularization of cryptocurrencies, since mainstream investors will become less skeptical about cryptocurrencies. This, in turn, can stimulate demand and positively influence the price and market capitalization in the long run.
The emergence of traditional financial instruments based on Bitcoin actually means its recognition by regulators as an object of investment. The fact that Bitcoin futures are gaining popularity in the highly regulated and the largest US market in the world can serve as an example for financial institutions from other countries. Among other things, in jurisdictions where cryptocurrency trading is prohibited, futures allow you to speculate on the price of the underlying digital assets.
On the other hand, large market participants have the opportunity to open short positions, a large amount of which can put pressure on the price of bitcoin. However, the top manager of the Chicago Mercantile Exchange (CME) Tim McCourt believes that futures do not affect the price of Bitcoin, since the BTC futures contracts currently represent only a small part of the market. The famous trader Peter Brandt agrees with him, who is convinced that one should not underestimate the impact on the market from the side of a huge number of small Bitcoin investors.
At the same time, Bakkt's delivery futures may serve as an additional factor for the demand for bitcoin. In addition, with the development of this market, the likelihood that the SEC will finally finally endorse bitcoin-futures-linked exchange funds ( ETFs ) will increase.
There is also an opinion that futures for bitcoin help to reduce the volatility of its price.
Be that as it may, the integration of a cryptocurrency market with a traditional one can potentially contribute to the massive acceptance of new assets, and hence their long-term growth.