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Bitcoin Markets Really Like CBOE Futures, Prices Sharply Spike

Despite speculation that future Bitcoin would make the world much more volatile, the launch of CBOE futures trading this evening sparked a huge rally for the currency. Futures trading began at 5 PM Central time on December 10 at a price of $ 15,000, matching the price of one Bitcoin on the Gemini exchange.

As of press time, roughly five hours later, the price of Bitcoin has risen to $ 16,800 on Gemini. Futures expiring in January 2018 are trading at $ 18,500, a $ 3,500 rise. This rapid rise has been triggered by two "circuit breakers" and is threatening to trigger a third. CBOE has implemented so-called circuit breakers to give traders a chance to break and reconsider in the event of large price movements. Anything more than 10% triggers a two minute stop to trading, while a move of 20% or more will cause trading to break for five minutes.

As we reported earlier tonight, CBOE's launch of its Bitcoin future product (which trades under the "XBT" ticker) caused such a sharp increase in demand that the exchange's website went down almost immediately. In the last five hours, about 2,000 contracts have traded hands. Each contract represents a bitcoin, implying a trading volume of greater than $ 30 mln in just a few hours. This is especially noteworthy considering Wall Street traders generally only work Monday through Friday. Odds are good that tomorrow will be a very big day, indeed.