Bitcoin futures surge as they debut for trades on a traditional platform
A traditional trading platform got its first full taste of bitcoin on Monday, with the price of the firstever futures contract for the digital currency jumping 20 percent.
It’s a step forward for the bitcoin, which has soared this year despite concerns that the increase in investor interest has transformed it from a newage currency into just the latest speculative bubble.
One prominent securities regulator warned that people were now taking out second mortgages on their homes to buy bitcoin.
The January contract for bitcoin futures closed at $18,545 on Monday on the Cboe Futures Exchange in Chicago. Trading began Sunday, and the price rose as high as $18,850, according to data from the Cboe.
The bitcoin futures’ early trading Sunday was not entirely smooth. The Cboe’s website crashed several times or slowed down, due to a surge of interest. The exchange halted trading twice on the first day to stem volatility. The exchange operator has rules in place to stop trading after price swings of 10 percent.
The Cboe said at least 20 trading firms “actively participated” in the first day of trading, without giving specifics. Volume of the bitcoin futures was relatively low, trading less than 4,000 contracts compared with the tens of thousands that typically trade for more popular commodities like oil, gold, or wheat, or the hundreds of thousands of contracts for popular stock-based futures like the S&P 500.
The Cboe futures don’t involve actual bitcoin. They allow investors to make bets on the future direction of bitcoin. Monday’s futures price indicates investors expect bitcoin to keep rising in the coming weeks, although at a slower pace than seen recently. The futures price was about 8 percent higher than the price of $17,100 quoted for bitcoin on the large private exchange CoinBase late Monday afternoon.
Cboe’s rival exchange CME will start trading its own futures on Dec. 18.
But with the surge of interest has come concerns about the bitcoin market being in a bubble.