Key Takeaways
- • Bitcoin futures began trading on the CBOE Futures Exchange in Chicago at 23:00 GMT on Sunday, marking the first time Bitcoin traded on a major exchange, according to BBC.
- • The launch followed a 17% rally that pushed Bitcoin above $18,000, after the currency had surged past $17,000 on Thursday and stood near $16,600 on Monday per Coindesk.
- • The January-expiry contract opened at $15,000 and is settled against the auction price on the Gemini exchange, operated by the Winklevoss twins.
- • The CFTC approved the CBOE and CME launches but warned of "potentially high level of volatility and risk"; CBOE's 10% circuit breaker was triggered twice in the first session.
- • CME is expected to list Bitcoin futures the following week, and the Futures Industry Association has criticized the CFTC for insufficient attention to risk.
Summary
Bitcoin began trading on a major regulated exchange for the first time when the CBOE Futures Exchange in Chicago launched its Bitcoin futures contract at 23:00 GMT on Sunday, according to the BBC. The contract allows investors to bet on whether the cryptocurrency's price will rise or fall without holding the asset itself. The January-expiry contract opened at $15,000 and quickly climbed above $18,000, a gain of about 17%, extending a rally that had carried Bitcoin past $10,000 and then above $17,000 on Thursday before a pullback. Coindesk put the price at about $16,600 on Monday.
The contract settles against the price of Bitcoin quoted on the Gemini exchange, founded by the Winklevoss twins, whom the BBC describes as among the first Bitcoin billionaires. A CBOE insider described the launch as low key, with "no champagne," and the exchange warned that its website was running slowly and could be temporarily unavailable. CBOE rules suspend trading for 10% moves in either direction; that mechanism was triggered twice during the first session.
The CME Group is expected to list its own Bitcoin futures the following week. Commentators framed the listings as a step toward legitimacy. Nick Colas of Data Trek Research said the contracts recognize Bitcoin "as an asset you can trade." Chris Ralph, chief investment officer at St James's Place, said he remained cautious but that the currency had "moved out of the shadows into the open," and expected more conventional investment banking participants to examine it.
The Commodity Futures Trading Commission approved both launches, but warned of a "potentially high level of volatility and risk." The Futures Industry Association, whose members include major derivatives brokers, criticized the regulator's decision for insufficient attention to risk. CBOE said it would work with the CFTC to monitor trading and foster a transparent, liquid and fair Bitcoin futures market. The BBC also noted that Bitcoin is not regulated by any central bank and has no universally recognized exchange rate, and that the settlement depends on a single exchange's auction price, raising questions about susceptibility to manipulation.
The contract settles against the price of Bitcoin quoted on the Gemini exchange, founded by the Winklevoss twins, whom the BBC describes as among the first Bitcoin billionaires. A CBOE insider described the launch as low key, with "no champagne," and the exchange warned that its website was running slowly and could be temporarily unavailable. CBOE rules suspend trading for 10% moves in either direction; that mechanism was triggered twice during the first session.
The CME Group is expected to list its own Bitcoin futures the following week. Commentators framed the listings as a step toward legitimacy. Nick Colas of Data Trek Research said the contracts recognize Bitcoin "as an asset you can trade." Chris Ralph, chief investment officer at St James's Place, said he remained cautious but that the currency had "moved out of the shadows into the open," and expected more conventional investment banking participants to examine it.
The Commodity Futures Trading Commission approved both launches, but warned of a "potentially high level of volatility and risk." The Futures Industry Association, whose members include major derivatives brokers, criticized the regulator's decision for insufficient attention to risk. CBOE said it would work with the CFTC to monitor trading and foster a transparent, liquid and fair Bitcoin futures market. The BBC also noted that Bitcoin is not regulated by any central bank and has no universally recognized exchange rate, and that the settlement depends on a single exchange's auction price, raising questions about susceptibility to manipulation.
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