CME's Bitcoin Futures Debut Wins With Trading Value

CME's Bitcoin Futures Debut Wins With Trading Value

CME's contract will compete with rival Cboe Global Markets which launched its own bitcoin futures earlier this month.

The price of virtual currency has experienced a new outbreak since Sunday, day of the launch of futures by the CME, jumping from $ 17,634 Friday to a record $ 19,511.18 Monday, according to data compiled by the supplier of Bloomberg financial data.

The top derivatives regulator in the US has created a new information portal for cryptocurrencies, a move that came just days ahead of a major bitcoin futures launch. Short sellers face expensive trading The futures exchanges offer short sellers a way of placing short bets on bitcoin but even when the second exchange opened trading the price of bitcoin continued an upward trend in price.

If the move passes, the futures contracts would be traded on Europe's largest derivatives exchanges, the Eurex Exchange. The new CME future traded above $20,000 but volume was lowly and the cash price soon slipped into negative territory.

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The current bitcoin futures on the website that expire in January are up following the launch. "We saw a nice open on light volume, but pretty uneventful so far", Mr Spen-cer Bogart, a partner at Blockchain Capital, said after trading began on Sunday.

Disclosure: CME Group is an investor in Digital Currency Group, CoinDesk's parent company. Institutional traders can buy and sell futures, but only a few of them can hold or transact in actual bitcoin for regulatory reasons. So in notional terms, 5125 Bitcoins traded at the CME today, compared to 3751 at the CBOE.

Volatility protection is in place with larger exchanges and CME stated they will suspend trading if the contracts rise or fall 7% or 13%, prices won't be allowed to move more than 20%.

The general sentiment in the market remains one of caution, which is reflected in margin requirements for the contracts. Instead, we will closely watch the Bitcoin Futures market as it develops and continue to evaluate the offering for our clients. The margin for an S&P 500 futures contract, by contrast, is 5 per cent, analysts said. The guidelines are inclusive of other margin requirements such as Options Clearing Corp.'s 44 per cent, required to clear contracts traded at Cboe, and the 47 per cent CME is demanding.

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