German Exchange Executives Consider Bitcoin Futures Contracts

20 December, 2017, 01:25 | Author: Barbara Daniel
  • Giant CME exchange launches bitcoin futures to muted response

Bitcoin futures started trading last night on CME Group, the world's largest futures exchange, and prices so far signal traders think the digital asset could climb higher.

The CME bitcoin front-month futures contract did open higher at $20,650, but dropped 6 per cent within the first half hour.

Since the opening, contracts have also notably continued trading at a premium against the price of bitcoin, which according to CoinDesk's Bitcoin Price Index (BPI) was $19,400 when CME launched trading of the bitcoin futures.

On the Cboe, the contract for delivery for January ended at $ 19,055, with 3864 contracts exchanged, a contract corresponding to a bitcoin.

"We're excited to support CME's new offering from the first day of trading and to extend to TradeStation clients the opportunity to trade this emerging market". The price for the contracts started at $19,500 and were up $60 as of Monday morning. The king of crypto inched up to just over $20k just before the trading doors were opened at CME.

The launch of bitcoin futures is viewed as a major step in the digital currency's path towards legitimacy, which should encourage the entry of big institutional investors.

Bitcoin was set up in 2008 by an individual or group calling itself Satoshi Nakamoto, and was the first digital currency to successfully use cryptography to keep transactions secure and hidden, making traditional financial regulation hard if not impossible.

The futures launch came as French finance minister Bruno Le Maire indicated that he would push for regulation of bitcoin. So in notional terms, 5125 Bitcoins traded at the CME today, compared to 3751 at the CBOE. Cardano is a decentralized public blockchain and cryptocurrency project and the company is developing a smart contract platform which "seeks to deliver more advanced features than any protocol previously developed", according to company's website.

The general sentiment in the market remains one of caution, which is reflected in margin requirements for the contracts. 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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