U.S. approves bitcoin futures but Brits plan regulatory crackdown

Cboe announces bitcoin futures to start trading Sunday

CME's bitcoin futures will be based on a "Bitcoin Reference Rate", which will be a "a once-a-day reference rate" based on the US-dollar price of the coins.

A huge price run-up this year has sparked intense investor interest in bitcoin, which soared to more than $11,800 at one point on Sunday, up more than 12-fold from the beginning of 2017, according to CoinDesk.

Trading will begin, under the ticker symbol "XBT", at the start of global trading hours at 6 p.m. ET, and will be free through December.

CME, the world's biggest exchange owner, and smaller venue Cboe, known for its volatility products, were allowed to offer the products Friday after pledging to US regulators that they comply with the law.

The fact that this price was achieved much before the end of the year and that the prices overshot this region to move beyond the $11,000 region during the month was a sample of how strong this bull run has been during the month of November.




Naeem Aslam, Think Markets analyst, said that the reports Britain wants to hike regulation of bitcoin and other digital currencies. But there are a couple of differences between bitcoin futures trading at the two exchanges.

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".

The contracts will be cash-settled, and the price will be based on the daily auction price from Gemini, a cryptocurrency exchange based out of NY.

The announcement from the Commodity Futures Trading Commission (CFTC) that it will allow the futures to be traded was seen as a watershed moment for the currency. 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.

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