CME to launch bitcoin futures trading on December 18

Marcus Newton
December 5, 2017

Nasdaq Inc also plans to list a futures contract based on bitcoin in 2018, Reuters reported last week. "We are committed to encouraging fairness and liquidity in bitcoin markets".

The Chicago Mercantile Exchange also said Friday that it will start offering bitcoin futures trading on December 18. Cboe will waive trading fees for these products for the duration of December.

Bitcoin trading markets seem to have already priced the CBOE's move into their assessment of the cryptocurrency's price.

According to the official release, CME Group has self-certified the initial listing of its Bitcoin futures contract, which will be listed on and subject to the rules of CME.

Bitcoin's rapid rise from less than US$800 in December past year to more than US$11,000 this week on Coindesk has stoked fears that it is a pricing bubble that could leave recent investors worse-off.

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Bitcoin hit a record above US$11,400 last Wednesday, but then lost 20% of its value in the following 24 hours. But there are a couple of differences between bitcoin futures trading at the two exchanges.

Cboe and CME were given approval from the Commodity Futures Trading Commission to list bitcoin futures on Friday after the rival bourses were able to show that their proposals met the necessary regulatory requirements.

At CBOE, the contract limit is 5,000. Market data from bitcoin exchanges Bitstamp, GDAX, itBit, and Kraken will be used to calculate CME's once-a-day Bitcoin Reference Rate (BBR). Those amounts may become higher in the future.

Cboe is working with online brokerages to allow retail investors to start trading its bitcoin futures as soon as possible, a spokeswoman for the company said. One bitcoin was worth just a fraction of a penny when it started trading in 2010, and by the start of this year was worth $1,000. The entry of institutional money is also expected to act as a stabilizing mechanism for the cryptocurrency's recent wild price swings.

Other reports by MaliBehiribAe

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