Bitcoin has taken another step toward the financial mainstream, after a USA regulator said it would let two traditional exchanges begin trading in Bitcoin-related financial contracts.
To view the full article, register now. 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.
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. While CME's announcement sent bitcoin's price hurtling past the $11,000 mark for the second time last week, CBOE's release hasn't had the same effect. "We are committed to encouraging fairness and liquidity in bitcoin markets". "To promote this, we will initially offer XBT futures trading for free." said Ed Tilly, Chairman and Chief Executive Officer of Cboe Global Markets. The first bitcoin futures contracts on a regulated USA exchange are set to launch on Sunday.More news: Patriots announce inactives for Week 13 matchup with Bills
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The launch of the first bitcoin futures contracts on a regulated USA exchange is expected to be a watershed moment for the cryptocurrency industry. The Cantor Exchange took similar steps to begin trading new binary bitcoin options contracts.
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).
However, despite the cash-settlement process, some institutional investors have expressed concern at the addition of bitcoin-derived products to CME.
The Commodity Futures Trading Commission said it had discussions with the exchanges to protect consumers from extreme price swings.