11 December 2017
Channel News Asia speaks to Cedric Jeanson, CEO of BitSpread, with the announcement of the launch of Bitcoin Futures on CME and CBOE, and what this means for the digital currency? Here is an extract of Cedric's personal responses from the interview
Are Bitcoin Futures and derivatives on digital currency ready for mainstream?
The launch of Bitcoin Futures is a response to financial investors asking for an exposure to digital currencies. Money flows into futures will be gradual. Before we run, we must walk and it will be a slow start. Remember, 4 years ago the Bitcoin market capitalisation was at $3 bn, today the market capitalisation of the entire digital currency ecosystem (bitcoin and altcoins) stands at $400 bn.
The ecosystem will greatly benefit from having more and more market makers to ensure the spot and the future are both very liquid, if the pace of things is to pick up quickly.
So what happens to the Bitcoin price now?
Asia is driving the spot market today. It would be intresting to follow the impact, especially if Asia launches its own Bitcoin Future to meet the demand from local investors.
Naysayers still insist that Bitcoin is a bubble?
That depends on where the focus is. Naysayers focus on the punters who make money from price appreciation. The second group which been an inherent part of the ecosystem since the early days, are market makers who add liquidity and help the ecosystem to grow. They don't have a view on the price of Bitcoin..
Let's remember too, that the Bitcoin network stands at 1/3 the market capitalisation of Facebook today, so it still has a long way to go. The Bitcoin blockchain network has inherent value.
Is regulation necessary?
Regulation is helping to legitimise the ecosystem. Japan learnt its lessons from the Mt Gox debacle four years ago, and today has taken the lead in introducing forward-looking regulation in this sector. Bitcoin is now a legal means of payment in Japan.