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CBOE beat CME to the punch for Bitcoin futures

Summary:

  • CBOE to launch bitcoin futures Sunday 10th December
  • First US exchange to offer the market
  • Bitcoin higher by around 3% on the day

The first US trade in Bitcoin futures will occur before the end of the week with the Chicago Board Options Exchange (CBOE) set to offer the contract live from 11Pm GMT on Sunday December 10. 

The news will give a head start to the CBOE on its larger crosstown rival the Chicago Mercantile Exchange (CME) which plan to launch its own bitcoin futures on December 18th. 

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 BTCUSD dropped sharply last night after making a new all-time high. The market is rising today on the imminent offering of Bitcoin futures in the US. Source: xStation

Bitcoin trade has been volatile in the last 24 hours with the cryptocurrency first surging to post a new all-time high of 11834 yesterday evening before comments from the UK treasury on a "crackdown" on the market saw price plummet by more than $100 in less than 2 hours. The latest news from the CBOE has coincided with a recovery and the market is currently higher by around 3% on the day. 

There is a case to be made for the introduction of futures contracts being both positive or negative for the market and it will be particularly interesting to see how the price reacts. On the plus side the fact that long standing and well respected exchanges will be offering derivatives on Bitcoin can be seen to add a further layer of legitimacy and should also attract more liquidity into the market. 

The incredible run higher seen in Bitcoin this year has been driven by and large by retail investors and the offering of futures on these exchanges could well attract institutional money - which is far larger in scale than retail. 

On the other hand futures will provide the first real opportunity for traders to short the market and therefore their offering could see some larger scale shorts being put on. The increase in market participants may also contribute to lower levels of volatility with recent trade in Bitcoin erratic even by its own high standards. 

 

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