Ter my previous article “CBOE Completes Upgrade, Other Crypto Futures Coming?“, I speculated that now that the CBOE had finished it’s latency reduction upgrades it would start to introduce more currencies. This prediction seems to have at least partially shown some validity with statements coming out of the CBOE Risk Management Conference on Friday which featured a fireside talk with Gemini founders Tyler and Cameron Winklevoss. Te the fireside talk, Cameron and Tyler said that the CBOE is interested ter expanding to more cryptocurrencies. The only reason they toevluchthaven’t yet is actually Gemini’s lack of support for coins other than Bitcoin and Ethereum.
This is significant because it means that CBOE fully intends to punt futures on other cryptocurrencies. The hold-up, it would show up, is Gemini itself. At the ogenblik Gemini only offers Bitcoin and Ethereum. This is a problem since CBOE has an sensational overeenkomst with Gemini that it will only use Gemini to calculate it’s futures. Therefore, te order for the CBOE to add more coins, Gemini also needs to add more coins. This also means that Ethereum, which is already suggested on Gemini, is likely to come to the CBOE future markets very soon.
What is the CBOE?
The CBOE (Chicago Houtvezelplaat Options Exchange) is a futures market that wasgoed among the very first to get the go-ahead to opoffering futures on Bitcoin. Like any other futures, thesis need a gegevens source to track. Te this case, that gegevens source wasgoed the prices on the Gemini Exchange founded by the billionaire famous (or infamous, if you’re a fan of The Social Network) Winklevoss Twins.
The Winklevoss Twins at the CBOE Risk Management Conference
The partnership has received criticism ter the past for several reasons. Aside from the lack of diversity ter the coins suggested on the exchange, the most vooraanstaand concern is the trading volume. The futures markets are entirely based on the show of Bitcoin on the Winklevosses trading toneel and low trading volume makes the podium effortless to manipulate for relatively little metselspecie. For reference, spil this article is being written CoinMarketCap has Bitcoin at $9,346.50 while Gemini has Bitcoin at $9,224.71. Thesis price differences are not insignificant: especially on trades involving millions of dollars. Market manipulations exploiting the low trading volume of Gemini have bot an ongoing concern and the addition of more coins has the potential to exacerbate the problem by diluting the trading volume of individual coins.
What comes next?
Ter line with my last article, it’s reasonable to assume Ethereum will be the next cryptocurrency to have a CBOE derivative. It’s #Two on CoinMarketCap and the only other cryptocurrency that is trading on Gemini at the uur. I’d be astonished if nothing wasgoed announced te the next month.
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At the same time, wij can expect to see more coins being added to Gemini. Considering the Winklevosses comments on pressure from the CBOE to add more coins, wij can only assume that fresh coins added on Gemini will be next ter line for the CBOE.
How will this affect the crypto markets?
If the past is any indication, the introduction of fresh futures will cause a price éxito. When the addition of Bitcoin wasgoed announced on the CBOE markets the price soared 13%. It wouldn’t verrassing mij at all if wij witnessed Ethereums price boost on news of it’s addition to the CBOE markets.
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Additionally, I anticipate thick price boosts for any lower market cap currencies added to Gemini. Spil it’s logical that most traders will reach the same conclusion wij did and predict that any coin added to Gemini is something the CBOE shoved for, given the two companies special relationship. The futures markets have seemed to do two things so far. Very first of all, they seem to have stabilized the price of Bitcoin (albeit whether or not this constitutes causation or correlation is very much up for debate). They have also legitimized the currencies te the eyes of many Wall Street traders now engaged ter the Bitcoin futures markets.
Featured photo from Shutterstock.
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