Bitcoin futures trading begins on CBOE Exchange in Chicago

The digital currency, launched on the CBOE futures exchange in Chicago at 11pm Sunday, will allow investors to bet on whether Bitcoin prices will rise or fall.

Its value had surged in the run-up to its futures debut, which saw it rise another 17% to above $18,000. Bitcoin’s introduction to the CBOE has been seen by some as a step towards legitimising the currency. The move is expected to be followed next week by a listing on the rival Chicago Mercantile Exchange.

CBOE trading saw the Bitcoin futures contract expiring in January start at $15,000 before rising to above $18,000. The contract is based on the price of Bitcoin as quoted on the Gemini Exchange.

The Gemini Exchange was set up by the Winklevoss twins, who were early fans of the crypto- currency and who have been called the first Bitcoin billionaires.

A CBOE insider said its start was low key, with “no champagne”. However, CBOE tweeted to warn that its website was running slowly and could be temporarily unavailable.

Anticipation of the first mainstream listings have helped the controversial currency soar past $10,000 and then over $17,000 on Thursday before retreating. The price of Bitcoin stood at about $16,600 on Monday, according to Coindesk.com.

Nick Colas of Data Trek research said the futures listings gave Bitcoin “legitimacy it recognises that it’s an asset you can trade”.

The CBOE and CME launches were made possible following approval by the US Commodities and Futures Trading Commission.

However, the regulator has warned investors about the “potentially high level of volatility and risk in trading these contracts”.

The Futures Industry Association, which includes some of the world’s biggest derivatives brokerages, has criticised the CFTC’s decision, arguing that insufficient attention has been paid to the risks involved.

Bitcoin is not regulated by any country’s central bank and has no universally recognised exchange rate.

CBOE rules suspend trading if Bitcoin prices rise or fall by 10%, in an attempt to reduce wild fluctuations. They kicked in twice in this first session.

“We are committed to continue to work closely with the CFTC to monitor trading and foster the growth of a transparent, liquid and fair Bitcoin futures market,” CBOE said.