Bitcoin surges in first day of futures trading
Heavy demand triggered halts on trading as price rose
Bitcoin prices surged Monday as contract futures for the cryptocurrency began trading Sunday evening on the Chicago Board Options Exchange Global Markets, the first traditional platform serving the currency.
The first-ever futures contract for the digital currency closed Monday at $18,545, ending its initial day of trading with a 20 percent gain.
The bitcoin futures contract that expires in January rose as high as $18,850, according to data from CBOE Global Markets. Bitcoin contract futures opened at $15,000 and 890 contracts were traded in the first 15 minutes Sunday evening, according to the Chicago-based CBOE. The number of contracts had grown to 3,200 by around noon Eastern Standard Time Monday.
CBOE reported two trading halts overnight due to heavy demand. One halt lasted two minutes and one for five minutes, according to a CBOE spokesperson. There were no trading halts Monday.
“We are very pleased with the results so far,” said Michael Mollet, director of product development at CBOE Global Markets. “The trading has been orderly. We hit a couple of our circuit breaker halts, but those are due to price movement and
not the product itself. We halted like our rules said we would and opened back up.”
Bitcoin values have skyrocketed more than 15 times in 2017, and the digital currency has been on a tear, last week topping $17,000 a coin before settling back around $15,000.
It has risen $5,000 in the past week.
Bitcoin has been the talk of Wall Street, dominating the financial press and its broadcast arms and even the chatter at
holiday parties.
“Despite fears by many of the bubble popping, so far the price is going up,” said JR Lanis, an attorney with Drinker Biddle. “The demand seems to be real. It is beyond just technologist speculators. You now have institutional investors participating in the market and keeping the price high. We will see if that continues.”
As bitcoin goes mainstream, industry observers said people should be cautious about investing.
“Digital currencies are volatile and the prices can go up and down,” said Brian Armstong, chief executive at digital currency exchange Coinbase, in a
blog. “Due to the rapidly changing price of digital currencies, some customers may not have sell limits that are sufficient relative to the value of total digital currency they are storing on Coinbase. Sell limits are one of the many measures Coinbase takes to protect client accounts and assets.”
Bitcoin was created by an unknown person in 2009 under the alias of Satoshi Nakamoto. Bitcoins can be used to buy merchandise anonymously, without a middleman and involving lower or no fees and no banks.
The currency is traded on “Bitcoin exchanges”
where people can buy and sell using various currencies. Bitcoins are a product of something called “blockchain technology,” and they are stored in digital wallets that exist in the cloud or on people’s computers.
The currency is unregulated and its future is uncertain. No one owns the bitcoin network. It is not tied to any government or country.
The larger CME Group, has announced its intention to trade bitcoin in the next few days. Nasdaq will begin trading the futures in 2018.