# Hey Steemit,
here is your Black Swan, so An important and interesting debate in the community arose after the introduction of BTC futures. While someone suggested that it’d been part of a strategy aimed at “financializing” the cryptocurrency industry, some others identified futures as the main cause of the fall of BTC prices during the last months, lastly a third category of people think futures have no impact on the course of prices. **In this article we will try to investigate on whether futures did indeed have an impact (and in what measure) on BTC’s price analyzing its behavior prior and subsequent to the introduction of futures.** But, first of all, three fundamental questions have to be answered: **1. What is a future?** **2. What are the specific characteristics of BTC future?** **3. In which way could futures have influenced BTC’s price?** ![BITCOIN FUTURES.png](https://cdn.steemitimages.com/DQmbZmfq41DoFG3ReAnh4uvnWkGQWBJxAWULhRGHThaYfmm/BITCOIN%20FUTURES.png) ## WHAT IS A FUTURE?
• A future is a financial instrument / contract that represents another financial activity (the underlying asset); following the subscription of the future the buyer undertakes to purchase the asset and the seller to sell it. Examples of underlying assets of a future are physical commodities, stocks, bonds or other financial instruments. • **The future is standardized to facilitate trading.** This means that the future must be settled at a predetermined later date with the corresponding price; moreover the future incorporates other provisions such as detailed clauses related to the future delivery, such as quantity and quality of the underlying asset of the contract. Some futures have a physical delivery of the asset (suppose you bought an oil barrel: you’d physically get one at the settlement of the contract) – as usually happens to the commodity future – or cash delivery, as usually happens when the underlying asset is a financial instrument. • **You can allocate a percentage of the whole contract value.** What makes investing in futures more appealing than investing in the underlying asset is that in the case of futures it is not necessary to invest financial resources equal to the value of the corresponding underlying asset: it is possible to only pay a “margin” (i.e. only a percentage of the total amount) that serves as collateral for the intermediary in case of relevant losses. This allows you to speculate with only a relatively small amount of money while profiting or losing with respect to the total amount.

#### Futures also simplify the process of selling short. When you want to sell short an asset you have to find someone who lends it to you, typically intermediary agents, and usually you have to pay a fee to such intermediaries. In the case of futures, being the future a peer to peer contract the process of lending is not necessary at all and no fees are due

## WHAT ARE THE CHARACTERISTICS OF BTC FUTURES?
First of all, BTC futures are listed on two markets: the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME). ![cboe.png](https://cdn.steemitimages.com/DQmVGV6f3DqzZYNT2bEkfjtAUcMmtByPFRwb99Lw6x5H6ZY/cboe.png) | ![cme.png](https://cdn.steemitimages.com/DQmfMujV5DSKLLU11Ddfk3BHqoKTGrJbitZxRLTbm9cx6Sf/cme.png) ------------- | ----------- As we said before, futures are standardized, nevertheless CBOE and CME present different features Feature | CME | CBOE ---- | ---- | ---- UNDERLYING ASSET | 1 BTC | 5 BTC SPOT PRICE | Bitcoin Reference Rate (BRR)* | Gemini** MARGIN | 35%| 40% SETTLEMENT | Finacially settled*** | Finacially settled***
*Bitcoin Reference Rate (BRR) aggregates 4 exchanges: itBit, Kraken, Bitstamp and GDAX (taking into account trades between 3 P.M. and 4 P.M. GMT) ** Auction at 4 P.M. on the settlement day *** A financial settlement is a “cash” settlement, meaning that at the expiration of the contract the settlement means is only going to be fiat money, not cryptocurrency. ### Price limit: • CME: as maximum level of excursion during a single trading session, CME considers 7%, 13% and 20% in both directions. While the first two levels could be widened, the third sets the maximum limit for the single trading session (meaning that the BTC future will be suspended until the next trading session). • CBOE: in this case there are two limits (10% and 20%) and eventual suspensions are only temporary: 2 minutes when price reaches 10% excursion, 5 minutes when it reaches 20% excursion. ### Listed contract: • CME: “monthly contracts listed for the nearest 2 months in the March quarterly cycle (Mar, Jun, Sep, Dec) plus the nearest 2 serial months not in the March quarterly cycle.” • CBOE: “the exchange may list for trading up to 4 near-term expiration weeks (“weekly” contracts), 3 near-term serial months (“serial” contracts) and 3 months on the March quarterly cycle (“quarterly” contracts). For a more thorough understanding of the CME and CBOE BTC futures you can check the links below: • CME: https://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures/contract-specifications • CBOE: http://www.cmegroup.com/trading/equity-index/us-index/bitcoin_contract_specifications.html

#### That said, have introduction of futures really influenced the price of BTC? #### Well, our answer is a big YES.

Keep following us and check the part 2 of this article to find out what part did BTC futures have in the last months BTC’s bearish trend. Best, Black Swan Team ![logo.png](https://cdn.steemitimages.com/DQmQTHqfTWoBtCsrgh3vGdUg8eZk7mXxuuTNCczq7qJBnM1/logo.png)