Futures Are Pulling Cryptocurrencies Out of the Dark
We’ll remember 2019 as the year when the path to a peaceful coexistence with established markets became clear.
The cryptocurrency market is growing up.
Photographer: Jack Taylor/Getty Images EuropePeople have a love-hate relationship with the futures markets. Futures are either financial drivers of rapid economic growth, turbocharging small amounts of capital to outflank entrenched barriers to innovation, or — to a populist — they are demonic pits where speculators manipulate prices and corrupt honest real economic activity. Since people also love or hate cryptocurrency, the rise of Bitcoin futures trading in 2019 is controversy-squared.
Looking past overheated rhetoric, Bitcoin futures exemplify the maturing of crypto markets. Futures trading has grown from almost nothing to about 50% of spot trading, according to data from 13 top exchanges.1 It has reduced both actual and implied volatility, increased liquidity, broadened the investor base, improved portfolio management and soothed regulatory concerns. We’ll remember 2019 as the year the path to peaceful coexistence between crypto and established markets became clear.