Bitcoin, the number one digital currency, is blooming and can experience an extended interest in future even from the conventional investors. That’s because Intercontinental Exchange Inc. is launching futures contracts on Monday which could lead to the delivery of crypto. It can be the beginning of the fresh new phase in the decade-long Bitcoin history. Since the market will be regulated federally, it can appeal to the traditional investors to indulge in Bitcoin buying and selling or add them into their portfolio, opines industry experts.
As TradeStation Crypto’s Product Strategy Head, James Putra puts it, the measures to centralize digital asset investments and build an infrastructure for them that’s scalable, are positive steps. Explaining further, he said that since ICE Contracts would be delivering actual Bitcoin, investors could possibly profit first from increased futures pricing and then go on to take coin possessions. This way, both pieces can be captured by investors.
According to analysts, Bitcoin has surged a whopping 177 percent this year compared to other assets on a global level. The positive scenario had happened earlier when CME Group Inc. started offering futures contracts settled in cash in December 2017. At the time, BTC had soared 9 percent, coinciding with its peak price i.e.19,511 dollars.
The firm’s offering
The firm is providing both the monthly futures contracts and daily futures contracts. While the daily futures contract will let the investors sell or purchase for 70 days, the monthly contract will have a 12-month listing. Upon expiration, both types of contracts could be rolled, stated White.
According to Putra, ICE’s daily contracts can help companies which make short-term loans of BTC as they can now hedge such loans that have a day’s duration, thanks to Bitcoin’s higher price volatility.
When it comes to ICE contracts, there have been many delays. However, after the company acquired the license from NY financial regulators to hold clients’ tokens in their Bakkt custody unit, things started falling into place. The operations of the unit have begun earlier in the month, making users familiar with its functions. Bakkt’s COO, Adam White, says that the contract has been designed while keeping in mind the institutional investors. The blend of custody with regulated trading sets the ICE concept apart, he added.
It is important to note that ICE launched its BTC futures plan back in August last year. It has Microsoft Corp. and Starbucks Inc. as its corporate partners.