CME plans market for bitcoin

BITCOIN prices rose on Tuesday after exchange giant CME Group announced it planned to launch a futures marketplace for the cryptocurrency in the fourth quarter.

The move is a vote of confidence in the controversial virtual currency, which has not been listed on a major exchange previously. The CME operates a range of prominent exchanges around the world and handles 3 billion contracts a year.

“Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract,” said Terry Duffy, chief executive of the Chicago-based CME exchange group.

“As the world’s largest regulated FX marketplace, CME Group is the natural home for this new vehicle that will provide investors with transparency, price discovery and risk transfer capabilities.”

The start of the exchange is contingent on regulatory approvals, CME said. The contract will be for bitcoin futures, a derivative product that sets pricing for a commodity or financial instrument at a future date. Some types of futures contracts rarely result in delivery of the underlying asset.

The cryptocurrency market has growth to $172 billion, with bitcoin accounting for 54 percent, CME said.

The value of bitcoin has risen rapidly since its launch in February 2009 from a few cents to about $1,000 at the start of 2017 before this year’s surge.