CBOE to launch bitcoin futures trading Sunday

In an unexpected development, the Chicago-based Cboe Futures Exchange (CFE) has announced it will list bitcoin futures contracts for trading on December 10. Several media outlets have suggested that the Nasdaq Stock Market will also soon begin trading futures of the digital currency, but the exchange has not yet confirmed that.

Bitcoin trading markets seem to have already priced the CBOE's move into their assessment of the cryptocurrency's price.

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

Cboe Global Markets Inc will launch its bitcoin futures contract on December 10, just over a week ahead of rival CME Group Inc, as the exchange operator takes the next step toward launching an exchange-traded fund based on the digital currency.

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Bitcoin futures will trade under the "XBT" ticker and will trade for 23 hours.

It means that investors will be able to buy and sell "future" contracts in Bitcoins - an agreement to buy the crypto-currency, for example, in three months time at a certain price. "We are committed to encouraging fairness and liquidity in bitcoin markets". But there are a couple of differences between bitcoin futures trading at the two exchanges. At the time in August, the CBOE was working with New York-based bitcoin exchange Gemini, which is run by investors Cameron and Tyler Winklevoss, ahead of the launch.

However, despite the cash-settlement process, some institutional investors have expressed concern at the addition of bitcoin-derived products to CME.

The announcement from the Commodity Futures Trading Commission (CFTC) that it will allow the futures to be traded was seen as a watershed moment for the currency. One bitcoin was worth just a fraction of a penny when it started trading in 2010, and by the start of this year was worth $1,000.

  • Rita Burton