"Cheap Shot": CBOE Chief Dismisses "Irresponsible" Bitcoin Futures Complaints

Adjust Comment Print

The 1,807 percent surge in Bitcoin this year has captivated the investing world.

Futures are derivatives-financial securities that depend on the value of an underlying asset and the expectation on the future price trend.

- Bitcoin (BTCUSD) is more than -14% off last week's high but +24% off of last week's low; the CBOE saw two trading halts overnight.

Image source: CBOE delayed quotes dashboard as of 3:53 PM. Such was the euphoria among early investors that trading was halted twice due to CBOE speed breakers, which slow or pause trading when price movements are excessive. CME Group is preparing to launch Bitcoin futures next week.

More than 5,000 of its bitcoin futures contracts have been traded so far, the exchange says.

- Read the DailyFX cryptocurrency glossary to review the basics of Bitcoin. That compares with daily trading volumes of more than $21.5 billion across all cryptocurrencies, according to trade website Coinmarketcap.

Bitcoin futures could actually end up reducing the price of Bitcoin. The exchanges assured the CFTC that the new products were compliant with the self-certification process rules, and the CFTC refrained from halting the self-certification. The bitcoin futures are cash-settled contracts that settle to a single, tradable auction price.

Winter Storm Watch: Up To 7 Inches Of Snow Coming Wednesday
Temperatures start chilly in the 20s Saturday and rise closer to, if not a bit above normal by the end of the weekend. With gusts between 30 and 40 miles per hour Wednesday afternoon, the wind chill will make it feel below zero.

CBOE's launch on Sunday stole a march on the upcoming launch of its cross-town Chicago rival CME Group's own bitcoin futures launch next Monday, December 18. This move was seen as a manoever to beat the earlier announcement from the competing CME that they would allow futures trading in bitcoin beginning December 18, 2017. China recently cracked down on the digital currency, making it illegal to buy or sell Bitcoin or offer any new forms of cryptocurrency.

As one might expect for an alternative market, the answer is more likely to be social media and other alternative data sources, rather than Bloomberg, CNBC and The Wall Street Journal.

After discussing whether or not Bitcoin was in a bubble back in October, my colleague Nick Cawley and I will be back on Tuesday, December 12 at 7:00 EST/12:00 GMT for the next webinar in our special series on Bitcoin trading and strategy - you can register here.

You can't do a bitcoin futures trade in India. In the note, Managing Director of Predictive Analytics at S3, Ihor Dusaniwsky, suggested that bitcoin as an asset would be "ripe for a pullback once the CBOE futures contracts go live" but also cautioned that the fees for shorting the GBTC ETF will be extremely high.

"The trading has been orderly".

Also on December 6, 2017, trading volume for BTC almost doubled from 6.9 billion to 12.7 billion and crosses the 10 billion volume threshold for the first time since Bitcoin crossed $10,000 (November 28, 2017). In this regard, the trade association for the futures markets, the Futures Industry Association warned the United States regulator that not enough risk evaluation has been done on Bitcoin and the risks it poses to financial stability.

Reports indicate, however, that trading has gone relatively smoothly since then.