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The CME Group, the world's largest derivatives exchange, announced plans to launch bitcoin futures in the fourth quarter of 2017.
Chicago's CME Group made the announcement on Tuesday, explaining that the futures will be settled in cash based on the Bitcoin CME CF reference rate, a Bitcoin price index launched last year in partnership with the British company Crypto Facilities. ]
"Given the growing customer interest in the evolving markets of cryptocurrency, we decided to introduce a Bitcoin futures contract," said Terry Duffy, president and chief executive officer. Chief Executive Officer of the CME Group. "As the largest regulated foreign exchange market in the world, CME Group is the natural home of this new vehicle that will provide investors with transparency, price discovery and risk transfer capabilities."
The launch of bitcoin futures is subject to CME's regulatory approval for these products. Assuming that regulators grant CME's demand, the exchange will become the second largest regulated exchange in the United States to offer bitcoin derivatives to institutional traders. Earlier this month, LedgerX quietly launched its trading and institutional options platform and recorded larger volumes than expected at its smooth launch.
The absence of bitcoin derivatives has kept many Wall Street investors out of the equation, raising concerns about low liquidity and lack of access to traditional products. negotiation. The introduction of futures and options is expected to introduce – in the words of Ari Paul, BlockTower's investment manager, a "wall of liquidity" on crypto-markets.
There is a wall of liquidity coming to Crypto. Dark Pools, Growing OTCs, Liquidity Aggregators, Bitcoin Futures and Options.
– Ari Paul (@AriDavidPaul) August 13, 2017
In addition, the presence of bitcoin derivatives opens the door to the launch of the first exchange-traded fund (ETF) that tracks the price of future bitcoins. Earlier this year, the Securities and Exchange Commission (SEC) said it could not review applications for these Bitcoin ETFs until the derivatives were listed and traded on a regulated exchange.
"Once a derivative product is launched, a bitcoin ETF will follow," veteran trader Don Wilson told Bloomberg earlier this month. "It's the common wisdom."
The price of bitcoin jumped immediately after the announcement, reaching historic highs of over $ 6,400 in all major markets.
Image from Shutterstock.