CME announces: bitcoin’s price rises as the launch of Bitcoin futures

Jason HenselDec 1, 20173 0333 votes +3 rating

CME announced Friday its new bitcoin futures contract will be available for trading on Dec.18. The CME announcement came as the Commodity Futures Trading Commission said it will allow the world’s largest futures exchange and its competitor, the Cboe Futures Exchange, to launch bitcoin contracts. A Cantor Exchange also self-certified a new contract for bitcoin binary options, the commission said.

© Article’s author: Evelyn Cheng.
© Source: CNBC

Bitcoin’s price rises as the launch of bitcoin futures

The world’s largest futures exchange, CME, announces it has completed self-certification with the Commodity Futures Trading Commission to launch its bitcoin futures contract on Dec. 18.

The news comes as Cboe and Cantor Exchange self-certify for their own bitcoin derivatives.

Bitcoin’s price rises as the launch of bitcoin futures will pave the way towards establishing the digital currency as a legitimate asset class and launching bitcoin exchange-traded funds.

Bitcoin traded 6 percent higher at $10,512, recovering partly from a 20 percent drop to $9,021.85 from a record high of $11,377.33 hit Wednesday, according to CoinDesk.

“I think it is going to enable finally the approval of bitcoin ETFs, and other digital currency ETFs, which is game changing,” Barry Silbert, founder and CEO of Digital Currency Group, said on CNBC’s “Squawk Box.”

CME’s announcement comes as other major exchanges rush to launch their own bitcoin derivatives products.

CME Group Inc. (CME:NASDAQ), through its exchanges, provides products across all asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals. The Company’s segment primarily consists of the Chicago Mercantile Exchange Inc. (CME), Board of Trade of the City of Chicago, Inc. (CBOT), New York Mercantile Exchange, Inc. (NYMEX)...

The CFTC does not approve derivatives contracts or endorse their underlying assets. “Commission staff held rigorous discussions with CME over the course of six weeks, CFE over the course of four months, and had numerous calls with Cantor,” a CFTC release said.

“Bitcoin, a virtual currency, is a commodity unlike any the Commission has dealt with in the past,” CFTC Chairman J. Christopher Giancarlo said in a statement. “As a result, we have had extensive discussions with the exchanges regarding the proposed contracts, and CME, CFE and Cantor have agreed to significant enhancements to protect customers and maintain orderly markets.”

In a separate release Friday, Cboe (Cboe Global Markets Inc.) said it has filed a product certification with the Commodity Futures Trading Commission to offer bitcoin futures trading. The certification is subject to regulatory review and a launch date “will be announced shortly,” according to a release.

A Cboe spokesperson initially told CNBC the bitcoin futures launch is expected “probably before the end of the year,” but later clarified, saying the exchange couldn’t be that specific. “We are operationally ready and we will be announcing a launch date shortly,” the spokesperson said in new statement.

Nasdaq plans to launch bitcoin futures as early as the second quarter of 2018, exchange officials told CNBC Thursday. Nasdaq would base its price off of 50 bitcoin sources from around the world, while CBOE is currently using one and the CME is using four, a Nasdaq spokesperson said.

Total: 6 comments
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  1. Kevin Parrish
    2017-12-3, 12:29PM
    Bitcoin, gold and silver are the way to go in this current financial climate. Even well know monetary experts state that many countries' economies are on the edge of a precipice. The record, un-repayable debt, personal and national, of countries like the USA, UK and Japan cannot be sustained forever. The piper has to be paid - eventually. smirk
  2. Jayce Wagner
    2017-12-3, 8:39AM
    As someone who holds BTC and regularly uses it for its intended purpose (paying for services or goods) I am an enthusiast but also a sceptic. I can buy BTC using a fast bank payment in a less than a minute - but then have to wait 20-30 mins for the 6 confirmations as it appears in my wallet. When purchasing using BTC, a retailer has the option to take a chance and not wait for 6 confirmations - many wait for 1 or 2 now. It's interesting and exciting but not mature. Imagine if your euros split overnight so that you had about 120% of your original total? That's happened in 2017 to Bitcoin, twice.
  3. Andrew Hard
    2017-12-2, 10:49AM
    A lot of people have been waiting and hoping for $10.000 for a few years. This is a beast that keeps growing. Not concerned about bubbles really. Bitcoin has bubbled and popped, will bubble and pop and repeat. It is a young and volatile (in value) invention. Game theory, Metcalfe's Law, industrial investment, the S shaped adoption curve, a lot of other things and the 150 odd billion current value could be an interesting play to watch out.

    A total of valuation of $ trillions would make it far more effective as an international remittance tool alone. I can't help thinking this will be like t was for those watching the unfolding of the Internet. Tim Bernards-Lee (or whatever his name is) didn't become the richest man in the world off it. Far from it. It was the layers, platforms and sites built on top of it that made the money. I wonder if this time this will be inverted.
    1. Mill Camius
      2017-12-2, 11:17AM
      Exactly this. It's still very early days for crypto-currencies and these fluctuations will be amusing in the future. Once they become easier to buy, use and store, and we see more large organisations adopting them we will really see them take off. It's interesting to watch old videos of people speculating on the internet and how they can't see it taking off. People being interviewed saying it's going to change our lives looked crazy but they were right. We're going to see the same with crypto-currencies in the future, but they could end up having a much larger impact on our lives than the internet. wink
  4. Roger Wabbit
    2017-12-1, 12:40PM
    Bitcoin, as a speculative gamble, could be a good one if you buy and sell at the right time, but nothing more. As a currency? What use is a currency which fluctuates so wildly? Why buy something with Bitcoin if by holding it might double or more in short time? I bought a loaf of bread with bitcoin, if I'd waited six months I could have bought the bakery! Why receive payment when the money you get could drop so rapidly? Currency needs stability as a measure of value!
  5. Jason Hensel
    Author: Jason HenselJournalist
    2017-12-1, 12:20PM
    So it's now only worth three times as much as it was a couple of months ago. Well that's a hell of a lot better performance than Sterling has managed thanks to the stupidity of Brexit. Not only that but anyone buying bitcoin knows they're taking a risk, whilst Sterling's losses have meant much more poverty for the whole UK, with many people becoming homeless, going without food or losing their jobs as a result.
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