CME schedules bitcoin futures launch
It’s official: Those interested in bitcoin will be able to buy futures through CME Group Inc. starting Dec. 18 On Oct. 31, the company announced that it would launch a bitcoin futures contract sometime in the fourth quarter “pending regulatory approval.” "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 Group Chairman and CEO Terry Duffy said in a press release.
The cryptocurrency is a sometimes-volatile and controversial investment. On Thursday, bitcoin fell to $9,000 after hitting an all-time high of $11,395 on Wednesday. Friday, bitcoin was trading near $10,100 before the news broke, and jumped above $10,650 afterward, according to CoinDesk..
When the CME announced that it would launch a bitcoin futures contract, some saw this a chance for the cryptocurrency to become more legitimate, since the trading and clearing will be regulated by the Commodity Futures Trading Commission (CFTC).
The CME futures contract could also mean less volatility for bitcoin because it will implement some controls, such as circuit breaks, that will halt trading following steep price swings.
"Though we have worked through a lengthy, comprehensive process with the CFTC 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,” Duffy said. “At launch, our new bitcoin futures contract will be subject to a variety of risk management tools, including an initial margin of 35%, position and intraday price limits, and a number of other risk and credit controls that CME Group offers on all of its products.” The new contract will be subject to the rules of CME.