Cboe launching Bitcoin Future earlier than CME


"Although we have worked through a lengthy, comprehensive process with the CFTC (Commodity Futures Trading Commission) to get to this point, we recognize bitcoin is a new, uncharted market that will continue to evolve, requiring continued collaboration with the Commission and our clients going forward", Terry Duffy, CME Group chairman and CEO, said in the statement. "We are committed to encouraging fairness and liquidity in bitcoin markets".

The move is clearly meant to steal the thunder from fellow Chicago derivatives exchange CME, which announced on Friday that it will list bitcoin futures on December 18.

Cboe's bitcoin futures contract will trade under the ticker symbol "XBT" and will be cash-settled based on the auction price from cryptocurrency exchange Gemini, Cboe said on Monday. The cryptocurrency is now trading at roughly $11,400, as per CoinDesk's Bitcoin Price Index (BPI).

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

Bitcoin hit a record above US$11,400 last Wednesday, but then lost 20% of its value in the following 24 hours.

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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".

Although the futures have yet to begin trading, Cboe president Chris Concannon has already hinted that the exchange may soon launch futures contracts for ether and bitcoin cash, according to a Business Insider report. But there are a couple of differences between bitcoin futures trading at the two exchanges.

Cboe Global Markets Inc.'s new bitcoin futures will go live at 5 p.m. To ensure minimal impact on markets due to bitcoin's price swings, traders will have to pay 33 percent of their trade's price upfront as compared to the 35 percent for CME bitcoin futures trades.

Bitcoin's rapid rise from less than US$800 in December a year ago to more than US$11,000 this week on Coindesk has stoked fears that it is a pricing bubble that could leave recent investors worse-off.