The recent rapid rise in the price of Bitcoin to $18,000 occurred against the backdrop of the preparation of stock exchanges for the trade of Bitcoin futures (XBT). The exchanges expect to attract investors and traders, reducing the risks of dealing with a crypto currency which still has great volatility.
Futures are a kind of contract in which the parties agree on the price and deadline for the execution of the contract. That is, the transaction will be held at a certain time in the future and at a predetermined price.
The Chicago Board Options Exchange (CBOE) and the CME Group received permission to trade Bitcoin futures from the CFTC (Commodity Futures Trading Commission) in early December. The CBOE launched trading on December 10th while the CME Group plans to add XBT trading from December 18th.
The launch of futures trading reinforced the interest of crypto-investors. Bidding on the CBOE started at $15,000 and within a few hours, the price increased by 25%. Because of the rapid growth under the rules of the exchange, trades were suspended twice to avoid possible fraud.
After the start of trading, the volume of trade in crypto-currencies reached $29 billion and transaction delays were observed: confirmations of more than 200,000 payments were delayed for more than a day.
Usually, the price of goods and the futures for them are about the same. But Bitcoin futures are being traded at 10-13% higher than the value of the cryptocurrency itself. For example, futures that will be executed in January cost $18,790, in February – $19,140, and in March – $19,120.
The CBOE futures contracts are based on the exchange rate of the Gemini exchange, whereas the CME Group futures contract is based on several sources.
Another American exchange, Nasdaq, is also going to add Bitcoin futures in 2018 and will set the price of its contracts based on more than 50 sources.
The next step of the CBOE exchange will be the launch of futures trading for Ethereum and Bitcoin Cash.