Summary: Futures and spot markets integration likely to be limited due to restrictions on flow of funds and arbitrage.
- The Introduction of BTC futures is likely to attract investments from institutions and high networth individuals.
- With 2 markets, futures and spot, price discovery of BTC could take place on either. Price discovery process might not work as well due to arbitrage limitations.
- Institutional monies might not flow into spot markets as institutions might be unable to deal with cryptocurrency exchanges (who operate the spot markets) for compliance/ regulatory reasons. Perhaps this is why the futures offered by CME and CBOE are USD cash-settled.
- Retail investors have no access to the CBOE and CME futures due to high minimum contract and margin amounts.
- Both markets are thus likely to function quite independently. However behavioural finance forces could drive prices in the spot market- e.g. new retail investors could be attracted to come onboard, existing retail retail investors could be affected by anchor biases.
- Concerns on volatility are partially mitigated by limits on intra-day price movements set in the futures contracts.
- Dynamics in the spot market should in principle not change much as the demographics of BTC holders are likely to remain status quo.
Understand your investing personality: https://steemit.com/blog/@valuatex/investor-personalities
Understand futures: https://valuatex.com/resources/equity/#futures (site may take a while to load sometimes)
Summary of the CBOE and CME futures: https://www.reuters.com/article/us-bitcoin-futures-contracts/cboe-cme-to-launch-bitcoin-futures-contracts-idUSKBN1E10KC
