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NYDIG files for SEC approval to trade in Bitcoin futures
$US1.87Billion liquidated from Bitcoin future funds
investors continue to flock to Bitcoin Futures funds
Bitcoin trading continues to be a focus point for investors
As each new week passes by another company is undertaking SEC approval to trade in Bitcoin which is a welcoming sign of things to come.
NYDIG is the latest firm to apply for SEC approval on the back of a campaign that saw the company secure $US100 million in financial backing to commence the Electronic Trading Funds firm.
The SEC application can be found Here
High volatility of Bitcoin saw $US1.87Billion liquidated from Futures trading as the coin dipped briefly below $US45,000 triggering sales.
As the Futures Trading service is the only method alongside cash settled purchases available legally it doesn't (in my opinion) capture the market correctly and is causing significant loss to investors.
Cryptocurrancy is well known to have enormous fluctuations in price variations and massive drops are quite often returned with higher peaks, especially with Bitcoin.
As futures trading initiatives are contracts entered at agreed prices where the Cryptocurrancy doesn't change hands but remains in the hands of the trader a dip below your contract price will see your contract voided and asset back to the firm.
If Bitcoin surges the next day the investor has lost out as it caused a "liquidation" however, the coin was never sold on an exchange but remains in the hands of the firm.
I believe this model to not be in the best interests of cryptocurrancy or trading and larger rise and fall margins should be recorded or remedial clauses that allows investors to retain their contract by providing a 48hr hold on triggered liquidation.
The current model will just see firms lose investors and massively profit off the volatility of the market, none of which will ever enter the cryptocurrancy economy.
What are your thoughts?