2019 will be remembered as the year when Crypto futures became commonplace on the established financial markets
Futures trading has always been somewhat controversial in the traditional financial markets with the proponents terming them as drivers of rapid economic growth with smaller investors being able to overcome the barriers of inclusivity, while the skeptics slam them for their speculative nature where prices can be easily manipulated.
The speculative nature of futures compliments the same property of the mainstream cryptos. While every new futures product has kicked in a price reversal in the digital assets — counting from CBOE & CME’s bitcoin futures from Dec. 2017 to the Monero futures we are going to talk about today, they have also earmarked the increased interest of institutional investors in the broader financial market.
According to the data from 13 top exchanges, futures trading has grown from zero to about 50% of spot trading. Be it the CME or the recently launched physical-settled bitcoin futures by Bakkt, the initial reaction has been a rather muted one, but gradually things have picked up as we have seen in both these cases (charts below).
And despite CBOE’s decision to drop crypto futures earlier this year, regulated futures trading volume and open interest have continued to grow as CME’s futures product gained from this move. Additionally, many of the crypto exchanges have started offering futures products in 2019 where investors can either gain exposure to the digital assets or hedge against the risk.
Having said that, trading products like futures have been restricted mostly to popular cryptos like bitcoin & ethereum, etc. Privacy centric coins like Monero & Zcash have been conspicuously absent from this market segment. Primarily because their focus on anonymity has entailed the wrath of regulators. Pressure from international bodies like the Financial Action Task Force (FATF) has caused many platforms to delist privacy coins like Monero.
On the other hand, widely used by regulators and law-enforcement agencies, Blockchain analysis firms such as CipherTrace does not include Monero & Zcash in the list of hundreds of tokens. Facing regulatory pressures & subsequent delistings, Monero has recently scored a small victory with the launch of Monero Futures Trading by a low-volume, Dubai-based spot/futures exchange called BTSE.
Although licensed by the Department of Economic Development, Government of Dubai & under the regulations of the Central Bank of United Arab Emirates, I wonder what impact the listing of Monero futures by this relatively unknown platform is going to have on the fortunes of the World’s biggest privacy coin. Nonetheless, it’s a start.
As per the blog post, the Monero futures trading would be available with 6 other crypto and 8 fiat currencies with the BTSE offering leverage of up to 100x. Any of the supported currencies can be used as collateral for the futures trading while having the option to choose the payout asset as well. Monero futures offered by the platform proclaim to be customizable, personalized & flexible.
Do you think this is going to turn the fortunes of the privacy-centric coins?
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