Bitcoin futures: Will it Be The Next Disruption in the Banking Industry?

No doubt, the launch of cryptocurrency has created some sort of insecurity in the mind of banking institutions. But since its inception, the world of cryptocurrency is expanding and gaining popularity among people.

Legislators and financial institution authorities are becoming increasingly concerned as internet shops embrace Bitcoins as a means of payment. This means of currency is far from traditional banking means, which is why all the financial institutions were worried sick about it. But as you might have heard about the anonymous report stating that Bank of America is allowing Bitcoin futures for their clients.

Bitcoin Futures Impact on Banking Industry

What does it imply? It simply means instead of taking it as a threat; some banks are already looking at it as an opportunity to gain clients, and many such financial institutions are following the same.

Here in this piece, we will try to find out if Bitcoin futures will be the next disruption in the banking industry.

So without any ado, let’s learn more about it.

What is the Story Behind the Launch of Bitcoin futures?

Bitcoin is the most valuable cryptocurrency in terms of market capitalization. It’s pretty volatile, much like other cryptocurrencies. Bitcoin’s price nearly halved as markets collapsed. This renders the Bitcoin markets uneasy for the investor.

This brings the question of what if there is a way to lock the value of Bitcoin for a predetermined date in the future. This simple question leads to the birth of Bitcoin futures. A contract is an arrangement among two traders to purchase or sell an item at a particular time, volume, and value. As large companies like CME Group and TD Ameritrade have invaded the sector, people just went crazy for Bitcoin futures. The Chicago Board Options Exchange homepage was overloaded once Bitcoin futures were introduced in December 2017.

What are Bitcoin futures?

Bitcoin futures allow you to trade on what the value of Bitcoin will be in the ahead times without having to hold any Bitcoin. Bitcoin futures have the advantage of being able to be handled on regulated exchanges. This might make Bitcoin investing more appealing to those who are wary of interacting with cryptocurrencies. Another benefit is that you may bet on Bitcoin’s value without needing to hold any Bitcoins.

How Bitcoin futures May Impact the Banking Industry?

The question of the hour is what is the impact of Bitcoin futures on the banking industry. With so many institutions adopting Bitcoins as a mode of transaction, it is high time for banks to embrace Bitcoin futures and regard it as a friend rather than a threat to prevent being pushed behind. Cryptocurrency adoption has the potential to expedite, enhance, and update financial services, and there have been several developments that can alleviate banks’ concerns about the dangers and allow them to focus on the potential advantages instead.

Benefits of Adopting Bitcoin futures in the Banking Industry

1. Smart Contracts – Since the completion of the transaction is dependent on computer code rather than an individual’s conduct, there is a lower level of trust required between parties when entering into a smart contract arrangement. Banks might help to build confidence by acting as a trusted third party for contracts such as loans, mortgage loans, and other transactions.

2. Security Concerns – Banks can assist Bitcoin users with their security worries. Many users are concerned about personal wallets and exchanges being hacked. Well-known institutions may assist in the protection of digital currencies against theft or hacking, placing clients’ fears to rest. Bringing cryptocurrencies under bank oversight might reduce illegal conduct and provide the impression that virtual currencies aren’t safe to outsiders.

3. Easy Onboarding and Assistance – Banks may assist in bringing in fresh, less seasoned individual investors by creating tools that make it easier for their clients to embrace Bitcoin futures. Banks may alleviate some of the anxiety felt by investors who aren’t specialists in the complexities of crypto by serving as a trusted third party with a solid reputation in the financial industry and the ability to keep clients’ money safe.

4. Easy Payments – The adoption of blockchain technology in the banking sector may improve the way transactions occur. When executing transactions, it offers a speedier and less expensive substitute to depository institutions. Using this technology, clearing and settlements could be completed much more quickly.

There you have it! This is the honest take on the Bitcoin futures and their impact on the banking industry. With the involvement of the banking sector, the Bitcoin market can reach a whole new level. And with cryptocurrency financial group Galaxy Digital, Goldman Sachs has started trading Bitcoin futures and has put a lot of confidence in the market.

With the demand for cryptocurrency in the market, banking institutions are gravitating towards a way to cater to the needs of their clients. There is no denying we will have a lot of it soon.