Also in November, it was reported that Nasdaq Inc. could launch futures based on the soaring cryptocurrency next year. The exchange operator did not confirm the news.
Derivatives help increase liquidity and improve markets for an asset category by allowing investors to bet on ups and downs of an asset, evening allowing individuals to adopt market-neutral strategies. They are also a key component in the creation of many futures-backed ETFs utilized by a range of investors.
It is also widely expected that bitcoin futures could pave the way for an exchange traded fund based on those derivatives. Previously, regulators have rebuffed issuers’ efforts to introduce bitcoin ETFs in part because some of those proposed products were based on a derivatives market for the cryptocurrency that did not yet exist.
In recent weeks, several ETF issuers have also filed plans for blockchain ETFs, which would hold stocks with exposure to the digital currency trade.
For more information on the cryptocurrency market, visit our Bitcoin category.