CME Futures Rolled Out Smoothly; Bitcoin Remains Bullish

Giant CME exchange launches bitcoin futures to muted response

Bitcoin futures on the world's biggest derivatives exchange signal the boom isn't over yet

However, this morning it opened at $19,086, and fell as low as $18,831, 1.3 per cent lower.

Bitcoin surged toward $20,000 in the minutes before trading began at CME, before paring gains.

On Dec. 10, Chicago-based derivatives exchange Cboe Global Markets launched bitcoin futures, which saw the price surge almost 20 per cent in its debut.

One CME futures contract is equal to five Bitcoin, whereas each Cboe futures contract is equal to one Bitcoin. According to Coindesk, the contracts have also continued trading at a premium against the price of Bitcoin since the opening. "This is a brand-new asset class and. perhaps a lot of investors want to sit back and see how this plays out before dipping their toes in this market". Coinbase CEO Brian Armstrong recently blogged that "access to Coinbase services may become degraded or unavailable during times of significant volatility or volume".

For one, Eurex will likely need a more robust online platform as CBOE saw outages following its release on December 10.


They also explained the importance of addressing bitcoin's volatility, uncertain regulatory standards, and the difficulty in assessing the digital currency's spot value. The contracts, which settle in dollars and trade on regulated exchanges, can be bought by institutional investors that are prohibited from buying bitcoin directly on largely unregulated exchanges. "Futures are a very positive development for the bitcoin market, as it will help everyone from miners to traders hedge risk, and having a price curve will help limit price swings".

"The introduction by CME and CBOE has added validity acknowledging bitcoin as a legitimate asset".

Bitcoin futures got underway at 10am AEDT on the Chicago-based CME exchange. Margin refers to the initial deposit made into an account in order to enter into a contract. 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. The margin for an S&P 500 futures contract, by contrast, is just 5 per cent, analysts said.

Early volumes have been light, and a short time ago around 460 contracts had changed hands on the most actively traded one-month forward contract.

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