For years, Bitcoin was barely a blip on the radar. Flash-forward to the present day. Bitcoin is now the driving force behind a new ecosystem of peer-to-peer trade. Bitcoin futures are rolling out. Options, ETFs, and IRAs are expanding. Traders everywhere are waking up to the new reality: Bitcoin is going mainstream, and it’s happening right now.
Bitcoin Futures
For proof of Bitcoin’s newfound influence, look no further than futures markets. The largest futures exchanges in the world are trading cryptocurrency. On December 18th, the Chicago Mercantile Exchange (CME) launches its first Bitcoin futures contracts. Cboe Global Markets, Inc. is already offering them. The best part is, you don’t have to be a crypto-expert to participate.
Both CME and Cboe Bitcoin futures are settled in U.S. dollars. This lets traders get exposure to Bitcoin’s price movements without having to hold any actual Bitcoin – a digital wallet is not required. CME and Cboe make Bitcoin work for average traders. Meanwhile, A Nasdaq bitcoin futures launch is coming in 2018. The rollout of these futures on major exchanges puts Bitcoin well into mainstream territory.
LedgerX and tZero: Bringing Bitcoin to the Masses
In the past, it could be difficult to trade Bitcoin. Low liquidity and a lack of infrastructure kept many investors away. Today, new platforms are changing the game. Regulated exchanges like LedgerX and tZero are streamlining the system and bringing cryptocurrency trading to a wide audience.
Bitcoin’s liquidity and scalability issues are dissolving, thanks in part to a cryptocurrency trading platform known as LedgerX. The Commodity Futures Trading Commission (CFTC) recently licensed LedgerX as a derivatives contracts clearinghouse for cryptocurrencies. LedgerX is also licensed to execute swaps.
In just the first week of its existence, LedgerX saw a lot of action – over $1 million in derivatives trades. It’s easy to see why. LedgerX provides a regulated environment with guaranteed clearing and settlement, opening the market to more investors. It brings Bitcoin the kind of institutional-grade infrastructure it previously lacked.
LedgerX is great news for Bitcoin. It provides oversight, reduces risk, and streamlines trades so that Bitcoin can work on a grand scale. With regulated trades, Bitcoin can achieve the level of volume and liquidity needed to draw big institutional investors.
We may also soon see a SEC- and FINRA-compliant cryptocurrency exchange. Patrick Byrne, CEO of Overstock.com, is in the process of an ICO for tZero, Overstock’s blockchain subsidiary. With the funds from tZero’s ICO, Byrne hopes to create a regulated platform for trading equity tokens.
The tZero token has two main uses. First, it allows users to pay for services and fees to improve the tZero ecosystem. Second, it enables participants to collect a portion of tZero’s revenue — like a dividend. In this sense, tZero has a profit-sharing component. It can be considered the first publicly-issued digital security.
The tZero ICO paves the way for blockchain’s integration into equity markets. Distributed ledger technology gives equity trading a boost by providing better transparency and reducing costs. Bitcoin also benefits from the liquidity of a SEC-regulated, mainstream trading platform. Whether or not Byrne’s ICO succeeds, tZero marks an important advance for blockchain and Bitcoin alike.
Price Surge, Popular Demand, and Bitcoin’s Future
The most obvious proof of Bitcoin’s mainstream appeal may be its massive price surge this year. All the factors mentioned above – the futures contracts, the increasing number of investment vehicles, and the innovations in blockchain-based finance – combined to create a perfect storm that drove Bitcoin’s price to a high that even the most bullish investors didn’t see coming.
The price of one Bitcoin rose from below $1,000 at the beginning of 2017 to over $17,000. Some investors predict a rise to over $100,000 by the end of 2018. It’s clear that demand for Bitcoin is at an all-time high. As the applications of blockchain technology across industry and finance begin to be understood, Bitcoin’s influence continues to grow.
We’re at the tipping point. Bitcoin is surging into the mainstream on a wave of advances in regulation, technology, and new financial infrastructure. More Bitcoin- and blockchain-based investment choices are available than ever before. This means that investors have the unique once-in-a-lifetime opportunity to enter on the ground floor, or close to it.
The viability of Bitcoin-based investment instruments is no longer in doubt. Futures contracts and officially regulated exchanges present an environment in which Bitcoin trading is workable and attractive for any investor. It’s becoming abundantly clear that Bitcoin is here to stay – not only that, it’s soon to become an integral part of mainstream finance.
For those able to add Bitcoin to a retirement account early, the benefits could be huge. IRAs like Bitcoin IRA offer an IRS-compliant mechanism for gaining exposure to the cryptocurrency. As blockchain technology goes mainstream, Bitcoin is becoming an essential component for any retirement portfolio.
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