Bitcoin's manic run-up this year has boosted volatility far in excess of other asset classes. The launch of futures may help dampen some of the sharp moves, analysts said.
"Hypothetically, volatility over the long run should drop after institutions get involved," said Ophir Gottlieb, chief executive of Los Angeles-based Capital Market Laboratories.
"But there may not be an immediate impact, say in the first month," he said.
The launch futures on an underlying spot market can lend more order to spot trading in the long run, by facilitating better price discovery and directional bets, not just long bets, J.J. Kinahan, chief market strategist at TD Ameritrade in Chicago, said.
Analysts, however, warn that much of how the futures market will react is a mystery, given that bitcoin is unlike any other asset.
"This is completely unknown territory," said Charles Schwab's Frederick.
Fears of inaccurate pricing and systemic risk to clearing houses should prices move sharply and clients fail to meet margin calls remain. Brokers have said that more safeguards are needed to protect against bitcoin's high volatility.
For a factbox on the launch of bitcoin futures contracts, see:
The risk of market participants manipulating the underlying spot market to their benefit in the futures market is another big concern.
"Large equity indexes show some volatility around cash settlements and those are in highly liquid, highly regulated venues," said Steve Sosnick, chief options strategist at Interactive Brokers Group Inc in Greenwich, Connecticut.
"Compare that to cash settlement in bitcoin, and there is a lot more uncertainty on how that would play out."
