Therefore, investors are now able to bet on whether Bitcoin prices will rise or fall. This movement has been seen by some as a step towards legitimising the currency and is expected to be followed by a listing on the rival Chicago Mercantile Exchange. At launch, CBOE tweeted to warn that its website was running slowly and could be temporarily unavailable.
Futures are a type of derivative contract that allows trading based on movements in Bitcoin prices, without requiring ownership of the currency itself.
The CBOE and CME launches were made possible following approval by the US Commodities and Futures Trading Commission (CFTC). However, the regulator has warned investors about the “potentially high level of volatility and risk in trading these contracts”.
At the moment, Bitcoin is not regulated by any countrys central bank and has no universally recognised exchange rate. CBOE says trading will be suspended for two minutes if Bitcoin prices rise or fall by 10%, in an attempt to reduce wild fluctuations. The Futures Industry Association, which includes some of the worlds biggest derivatives brokerages, has criticised the CFTCs decision, arguing that insufficient attention has been paid to the risks involved.
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