CME Launches Bitcoin Futures Contracts


Cryptocurrency and futures speculation is very risky due to the extreme leverage that many futures contract have. The opinions expressed are strictly personal and are not to be considered as any “Buy” or “Sell” recommendations.  Any Elliott Wave positions I show are strictly a best guess, as it could take many years before any real wave pattern could emerge. At this time I know very little about the specs on these contracts, but they contain 5 Bitcoins per contract.

When Bitcoin futures spiked to $20,000, the contract had a $100,000 US dollar value.  For every $1 that one Bitcoin moves up or down, the futures contract jumps up or down by $5. There are stiff margin requirements, especially  when shorting. The good news is that it’s all based on cash settlement prices, which has no underlying impact on Bitcoin prices.  I have no idea how much leverage that they use just yet, but a general reference point would be 5:1 or the price of one Bitcoin.

I will not make Bitcoin commentary a big thing as there are still huge problems with most Cryptocurrencies. The chart below is a bit longer than 5 days old, so any degree levels I do have are very small.


As we can see, the volumes have been extremely low with a huge surge going 300 in a matter of minutes. What we did get tonight is another huge spike to the upside, leaving a huge gap in its wake. Due to the low volume overall, we could get many more gaps open up everywhere. Until this fills out more all gaps will mean little in the big scope of things.  The SP500 also spiked along with Bitcoin futures, but that also can be brushed off as a coincidental event.

When I calculated the Gold/Bitcoin Futures ratio, it worked out to about 15.4. It took 15.4 gold ounces to buy one Bitcoin. Only once have I recorded anything higher. Still,  we really don’t know where the Gold/Bitcoin ratio can max out at, so we really don’t know if it is in a price bubble even at $20,000

There are currently 1361 Crypto currencies out as of today, but I would expect for the amount of Cryptos to keep growing in the near future.

All Cryptocurrencies | CoinMarketCap

When they stop flooding the markets with Crypto ICOs, then we may get close to our first washout stage.