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- Bitcoin and Ethereum found bottoms in late January
- Higher lows and higher highs suggest another rally is underway
- Micro put and call options offer more flexibility
- Options increase futures liquidity
- Yet another step in the asset class’s maturation
Options are short-term derivatives that provide market participants with the right but not the obligation to buy or sell an asset at a specified price for a specified period. Put and call options are tools traders, hedgers, and many other market participants utilize to enhance their strategies.
Recently, the Chicago Mercantile Exchange began offering market participants put and call options on and futures.
Recall that and took off on the upside when the CME rolled out futures contracts on the cryptocurrencies. Bitcoin futures began trading in late 2017; Ethereum futures became available in 2021. In 2021 as well, micro futures on the leading cryptos increased the addressable market for the burgeoning asset class by making it cheaper for traders to participate.
The CME’s current move, which launched on Mar. 28, could once again boost the digital tokens as well as exponentially increase the number of derivative products available for trading those assets. Leveraged ETF and ETN products use options to turbocharge price action on the up and the downside.
Just as Bitcoin, Ethereum, and many of the other over 18,700 cryptos , options on the micro futures will improve liquidity and offer market participants more tools with which to achieve their investing goals.
Bitcoin and Ethereum found bottoms in late January
After putting in bearish key reversal trading patterns on the daily charts on Nov. 10, 2021, Bitcoin and Ethereum fell to lows on Jan. 24.
Source, all charts: CQG
As the chart above highlights, nearby Bitcoin futures fell from $69,355 on Nov. 10 to $32,855 on Jan. 24, a 52.6% decline.
Over the same period, nearby Ethereum futures dropped from $4,902.75 to $2,158,…
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