The Effects of Bitcoin Futures on Bitcoin Market

Abstract

In the five years after the launch of bitcoin futures, academics and investors' perceptions have shifted from the early view that they raise the risk of bitcoin to the present acceptance of their ability to serve as derivatives. This change indicates that bitcoin futures have the potential to improve. What influences the bitcoin market has received from bitcoin futures is investigated in this paper. The introduction of bitcoin futures has offered a feasible hedging strategy for bitcoin investors, enhanced the stability and information effectiveness of the bitcoin market, also eased the investment barrier for bitcoin, based on study and comparison of previous research on bitcoin futures. However, because bitcoin futures are the novel type of futures contract, the market is complicated, and investors prefer to trade unregulated futures, whereas regulated futures are traded in considerably lesser quantities due to position limitations. Exchanges that regulate bitcoin futures should consider changing their contract positions to allow more investors to engage in trading while obtaining regulatory protections in to enable the bitcoin futures market to develop more maturely in the future.