CME to Begin Trading Bitcoin Futures December 18

02 December, 2017, 00:38 | Author: Darnell Patrick
  • A Bitcoin coin is seen in an illustration

The U.S. Commodity Futures Trading Commission will allow futures trading of bitcoin.

"We are pleased to bring bitcoin futures to market after working closely with the CFTC and market participants to design a regulated offering that will provide investors with transparency, price discovery, and risk transfer capabilities."

CME said on Friday it would list its bitcoin futures contract, which like CBOE's will be priced against and settled in the cash bitcoin market, on December 18.

Cboe said they are "operational ready".


Bitcoin, which had been trading at around $10,150 U.S. on the Luxembourg-based Bitstamp exchange before the news, jumped following the news, leaving it up more than six per cent on the day. After a record high on Wednesday for bitcoin price of $11,377, there was a 20 percent drop from profit takers down to $9,021; it has since fluctuated several times and is now selling at around $10,500. It was last up 6.6 percent at $10,600. While CFTC approval isn't required, the regulatory body could have halted the CME's plans if it wasn't satisfied with the self-certification. On account of the unique challenges bitcoin creates, he added that the exchanges "have agreed to significant enhancements to protect customers and maintain orderly markets".

CFTC Chairman Christopher Giancarlo warned investors, however, that the nascent underlying bitcoin cash markets remained largely unregulated and mostly beyond the commission's purview. Instead, they only have to file a written self-certification with the regulator.

After the new contracts launch, the CFTC will undertake "a variety of risk-monitoring activities", like "monitoring and analyzing the size and development of the market, positions and changes in positions over time, open interest, initial margin requirements, and variation margin payments, as well as stress testing positions".

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

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