As Bitcoin crosses the $10k per coin barrier, the Nasdaq exchange will begin to offer “Bitcoin futures” at the beginning of next year.
This makes the Nasdaq one of 3 major financial institutions (along with Cantor and the Chicago Mercantile Exchange) to develop a formal method for trading Bitcoin in a similar manner to more traditional assets like gold or stock.
“Explain ‘betting on futures’ like I’m 5”
Someone who owns 1 Bitcoin valued at $10k today, could “bet” that the future price will decline and arrange a “futures contract” with a buyer to sell her Bitcoin at for $10k a year from now, regardless of the coin’s value at that time.
If Bitcoin tanks, she doesn’t lose a dime; if it’s worth $100k in a year, the other investor makes out like a bandit.
Good. Nasdaq’s move is yet another vote of confidence that Bitcoin is here to stay, providing another option for more risk-averse investors to get in on the action.
And, as crypto continues its march into the mainstream, now you’ll know what to say when your eccentric, rich uncle asks you about Bitcoin over the holidays.