World's largest futures exchange set to launch bitcoin futures Sunday night

World's largest futures exchange set to launch bitcoin futures Sunday night

On Sunday, a week after Cboe Global Markets Inc. listed the first bitcoin futures contracts, CME Group Inc. debuted its own derivatives for the cryptocurrency. "CME is a way bigger player in futures than cboe", John Spallanzani, chief macro strategist at CFI Group, told Business Insider.

CME got off to a faster start with more efficient pricing.

That looks like a win for the CBOE but there's more below the surface.

One CME futures contract is equal to five Bitcoin, whereas each Cboe futures contract is equal to one Bitcoin.

Cryptocurrency heavyweight Bitcoin (BTC) pushed forward in overnight trade, aided by a strong performance in the futures market.

The reference price, from which price limits are set, is $19,600 for the February contract, $19,700 for March and $19,900 for June, according to CME. Futures prices and bitcoin price The futures at CME traded about 2 percent about that of bitcoin's price this morning.

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"I have said consistently that virtual currencies are unlike any commodity that the CFTC has dealt with in the past, and I know they pose challenges for the SEC as well", he said last week following remarks from the head of the SEC, Jay Clayton.

Early volumes have been light, and a short time ago around 460 contracts had changed hands on the most actively traded one-month forward contract.

Cboe futures are based of Bitcoin value on just one exchange - the Gemini exchange, founded by the Winklevoss twins - while CME futures will be based off four exchanges.

The CME futures are another step into the mainstream financial world for an asset created in the wake of the 2008 financial crisis as an alternative to banks and government-issued currencies. Institutional traders can buy and sell futures, but only a few of them can hold or transact in actual bitcoin for regulatory reasons. The margin for an S&P 500 futures contract, by contrast, is 5 per cent, analysts said.

Are Bitcoin futures good or bad for the crypto market?

The CME Group began trading for bitcoin futures last night, and the beginning of the offering was not auspicious: prices opened at $20,650 and fell 3.8% during the evening to $18,760, before another small rise.

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