CBOE Announces Bitcoin Futures Trading, Starting Dec. 10

Nasdaq Inc also plans to list a futures contract based on bitcoin in 2018, Reuters reported last week.

Once liquidity builds in the Cboe bitcoin futures contract and the exchanges are able to show how their oversight of the underlying market works, Cboe plans to reapply with the U.S. Securities and Exchange Commission to launch a bitcoin ETF, Chief Executive Officer Ed Tilly said in an interview on Friday.

The Chicago Mercantile Exchange (CME) has been beaten to the punch by the Chicago Board Options Exchange (CBOE) in bitcoin futures trading. Cboe will waive trading fees for these products for the duration of December.

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Cryptocurrency that trades 24 hours a day and seven days a week, climbed as high as $11,799.99 on the Luxembourg-based Bitstamp exchange.

But one factor that did help to boost the prices was the news that the CME and the CBOE are looking to launch futures trading in bitcoins. But there are a couple of differences between bitcoin futures trading at the two exchanges. Duffy sought to assuage those concerns by stressing that the contracts will be subject to a myriad of risk management tools to prevent bitcoin's volatility from having unwanted ripple effects into other markets. At the time in August, the CBOE was working with New York-based bitcoin exchange Gemini, which is run by investors Cameron and Tyler Winklevoss, ahead of the launch. While CME's announcement sent bitcoin's price hurtling past the $11,000 mark for the second time last week, CBOE's release hasn't had the same effect. Bitstamp, GDAX, itBit and Kraken are the constituent exchanges that now contribute the pricing data for calculating the BRR.

Last week, a JPMorgan global markets strategist forecast that the introduction of bitcoin futures would legitimize cryptocurrency in the eyes of both institutional and retail investors, transforming the cryptocurrencies into "an emerging asset class". To ensure minimal impact on markets due to bitcoin's price swings, traders will have to pay 33 percent of their trade's price upfront as compared to the 35 percent for CME bitcoin futures trades.

  • Darren Santiago