Yet another step forward in the institutional adoption of bitcoin will be taken today with the launch of the much-anticipated bitcoin options market by the major financial derivatives marketplace Chicago Mercantile Exchange Group (CME).
While a consortium known as Bakkt, which includes New York Stock Exchange parent Intercontinental Exchange Inc., began offering options last month, volumes and open interest have been "rather small", strategists led by Nikolaos Panigirtzoglou wrote in a note January 10.
Although the futures are cash-settled - meaning that no on-chain Bitcoin changes hands in trading these contracts - trading on the exchange purportedly has a large effect on the underlying market.
Given CME's dominance in trading Bitcoin futures on regulated exchanges, it is expected this new offering may change things.
All these trends point in the direction of high anticipation for the launch of the CME futures contracts for BTC.
As reported by Bloomberg, a note written by strategists at JPMorgan Chase & Co indicated "high anticipation" to the introduction of bitcoin options by market participants.
Going by the report, the issuance of Bitcoin contracts has been unstable in terms of performance considering the past record.
The JP Morgan report also states the intrinsic value for bitcoin has been on a steady rise for a while now but always at a threshold below the market price.
Since last week, the price of Bitcoin has risen 15% and the volume, according to one report from a cryptocurrency research firm, has almost doubled, boding well for bulls if momentum can be maintained. JPMorgan calculates intrinsic value by treating Bitcoin as a commodity and looking at the marginal cost of production including computational power employed and cost of electricity.