CME Group To Offer Bitcoin Futures Trading

CME Group To Offer Bitcoin Futures Trading

CME Group To Offer Bitcoin Futures Trading

Due to its volatility, bitcoin futures will be subject higher margin levels and intraday price limits, the CME said. The regulatory process used is called self-certification.

The CME Group, which owns the Chicago Mercantile Exchange, will start trading bitcoin futures December 18, the company said. This memorandum is considered advertising under applicable state laws.

The fact that this price was achieved much before the end of the year and that the prices overshot this region to move beyond the $11,000 region during the month was a sample of how strong this bull run has been during the month of November. Consequently, Cboe will become the first USA exchange to support trading for a cryptocurrency-derived futures product.

Bitcoin's rapid rise from less than US$800 in December previous year 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.

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CME, which owns various derivative trading platforms such as the Chicago Mercantile Exchange, said in a statement on Friday that there will be risk-management measures in place as bitcoin is a "new, uncharted market". The futures will be cash-settled contracts based on Gemini's auction price for bitcoin, denominated in USA dollars. But there are a couple of differences between bitcoin futures trading at the two exchanges.

Derivatives marketplace CME Group has announced that it is going to launch Bitcoin futures contract on December 18, 2017.

On the other hand, CME plans to use the services of four bitcoin exchanges - Bitstamp, GDAX, itBit and Kraken - to set its Bitcoin Reference Rate (BRR). Those amounts may become higher in the future.

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".

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