'According to Plan': CBOE Bullish on First Day of Bitcoin Futures Trading

Killer Whales Could Be Controlling the Bitcoin Market

Here is how it works: For example, as on 13 December, a bitcoin futures was valued at $18,000 for a contract ending on 14 March, $17,700 for 14 February, and $17,630 for 17 January.

Wall Street investment firm Cantor Fitzgerald, as indicated earlier this month by the Commodity Futures Trading Commission (which oversees the US market for derivatives), is preparing to create binary options tied to bitcoin.

Chicago-based exchange Cboe has become the first USA traditional finance exchange to trade the digital currency, allowing investors to bet on the price of it.

Bitcoin futures are here. Not surprisingly, the CBOE's usage of the exchange platform Gemini, owned by the Winklevoss twins, may allow the newly minted "Bitcoin Billionaires" to further capitalize on the successes of the cryptocurrencies.

While market participants are still heavily divided over the digital currency's utility, value and safety, they expect the futures contract to offer a legitimate means for institutions to bet on bitcoin.

Volatility - the lifeblood for traders - has been extreme, near levels seen in equity market crashes.

Killer Whales Could Be Controlling the Bitcoin Market

The futures are cash-settled contracts, allowing investors exposure without having to hold any of the cryptocurrency. In 1750BC in Mesopotamia the Babylonian king, Hammurabi, introduced a legal code, which included stipulations for trading goods at a future date for an agreed-upon price.

There had been speculation that the futures launch would trigger more gyrations in the market. In the note, Managing Director of Predictive Analytics at S3, Ihor Dusaniwsky, suggested that bitcoin as an asset would be "ripe for a pullback once the CBOE futures contracts go live" but also cautioned that the fees for shorting the GBTC ETF will be extremely high. "If it works out and it gets more established and it trades like a store value and it doesn't move up and down 20% and there's liquidity in it, we'll get to it".

The first day of bitcoin futures trading on the CBOE exchange is over and the day largely went according to plan, according to its CEO.

One key requirement of futures contracts is that they must be traded on standardised exchanges such as the CBOE or CME. Somebody who invested $1,000 in Bitcoin at the start of 2013 would now be sitting on around $1.2 million. CME Group is expected to launch contracts on december 18. In this regard, the trade association for the futures markets, the Futures Industry Association warned the United States regulator that not enough risk evaluation has been done on Bitcoin and the risks it poses to financial stability. Heightened excitement ahead of the launch of the Cboe futures gave an extra kick to the cryptocurrency's scorching run this year. In Korea, the Financial Services Commission financial regulator issued a directive that bans securities firms from taking part in Bitcoin futures transactions.

The launch of Bitcoin futures has aggravated other regulators, with scrutiny beginning to encircle the cryptocurrency.




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