Will the day CME launches Bitcoin options be the end of altcoins?

This article comes fromNewsbtc, original author: Nick Chong

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This article comes from

, original author: Nick Chong

If all goes well, CME is expected to launch options business based on Bitcoin futures on January 13, 2020—that is, today, and they will also become the first regulated exchange to provide Bitcoin options business One of the platforms. (Odaily Jun o-daily Note: When this article was written, CME Group’s Bitcoin options business was originally scheduled to be launched on January 13, 2020. The news of the launch has not yet been released, and the status on the official website is still "Coming Soon".)

In the past few years, CME Group has been one of the most influential companies in the emerging market of cryptocurrency, so many market analysts estimate that the launch of Bitcoin options will have a wider impact on the entire cryptocurrency market . For example, Nikolaos Panigirtzoglou, managing director and strategist at JP Morgan, said that although Bakkt, a subsidiary of Intercontinental Exchange, has started to provide options business in December 2019, its trading volume and open interest are very small. Unlike CME Group, which has always dominated the market in Bitcoin futures trading, especially in the past few days, the open position has increased by 69% compared with the end of the year, and the number of large open position holders has increased significantly, so The launch of options contracts on January 13 is likely to move the market.

However, in addition to positive effects, CME Group's Bitcoin options may have some other unexpected results, especially for altcoins (altcoins).

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Renowned cryptocurrency commentator and analyst Ceteris Paribus recently pointed out that the upcoming launch of CME Bitcoin options could cause altcoin prices to drop, saying:

“While people don’t feel much right now, when we see products like bitcoin options appear more and more, then the more bearish it will be on most altcoins.”

Ceteris Paribus made this point because he felt that "99% of altcoins are quasi-derivatives of Bitcoin." When real, regulated bitcoin derivatives appear on the market, traders will definitely be more willing to trade those products, which will lead to a decline in the trading volume of altcoins that previously played the role of "alternative bitcoin derivatives", eventually triggering prices fall. Not only that, but over time, altcoins will become less liquid and buying pressure will also be affected.

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Although optimistic about Bitcoin derivatives, in fact... the competition is not small

While CME Group's new series of bitcoin derivatives may hurt altcoins, from another perspective, these products may help bitcoin become a mainstream financial asset.

As Nikolaos Panigirtzoglou said, people are full of expectations for the upcoming options contract, and trading activities based on CME futures contracts have begun to gradually increase, especially in recent days, showing an unusually strong attitude, which also reflects the options contract market. Participants have high expectations.

Still, competition in the bitcoin options trading space is getting fiercer.