CME Group sets date for Bitcoin futures launch

CME Group sets date for Bitcoin futures launch

CME Group sets date for Bitcoin futures launch

But one factor that did help to boost the prices was the news that the CME and the CBOE are looking to launch futures trading in bitcoins.

The price of bitcoin slumped 10.9 per cent from a record high of $US11,845 to $US10,550 before bouncing back to $US11,294 at 11am Perth time.

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.

Trading will begin, under the ticker symbol "XBT", at the start of global trading hours at 6 p.m. ET, and will be free through December.

The Commodities Futures Trading Commission, the primary regulator for exchanges like the CME, gave approval for the exchange to create bitcoin futures after six weeks of discussions.

Bitcoin trading markets seem to have already priced the CBOE's move into their assessment of the cryptocurrency's price. Its price has jumped more than tenfold this year.

Naeem Aslam, Think Markets analyst, said that the reports Britain wants to hike regulation of bitcoin and other digital currencies.

CME Group's Bitcoin futures will be cash-settled, based on the CME CF Bitcoin Reference Rate (BRR) which serves as a once-a-day reference rate of the USA dollar price of bitcoin. To ensure minimal impact on markets due to bitcoin's price swings, traders will have to pay 33 percent of their trade's price upfront as compared to the 35 percent for CME bitcoin futures trades.

Bitcoin derivatives will likely attract more heavyweight investors, which will gradually reduce the cryptocurrency's volatility, as well as increase its liquidity and steady its exchange rate with fiat currencies, said Wang Liren, senior researcher at the China Blockchain Research Alliance.

CME and CBOE have also agreed to enter into data-sharing agreements, particularly on the settlement process, so the CFTC can conduct its own surveillance on the new financial contracts.

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