Cboe submits product certification for bitcoin futures

Barron's On Why Bitcoin Has Stormed Wall Street

The CME announcement came as the Commodity Futures Trading Commission said it will allow the world's largest futures exchange and its competitor, the Cboe Futures Exchange, to launch bitcoin contracts.

The move will subject some of the bitcoin market to federal regulation for the first time. CBOE has not yet set a launch date but has said it plans its listing by year-end.

The bitcoin price surged in response to the news, rising to a daily high of $10,760 on bitcoin exchange Bitfinex.

To guard against volatility, CME and CBOE will enact stricter-than-usual risk-management safeguards, including initial margin requirements of between 35 percent and 40 percent. It was last up 6.6 percent at $10,600. While CFTC approval isn't required, the regulatory body could have halted the CME's plans if it wasn't satisfied with the self-certification.


The new contract will be traded on the CME Globex platform.

The press release stated: "Commission staff held rigorous discussions with CME over the course of six weeks, CFE over the course of four months, and had numerous calls with Cantor".

The bitcoin price rallied to a 24-hour high following the announcement that USA derivatives exchange CME has self-certified to list bitcoin futures contracts in mid-December. "Nevertheless, investors should be aware of the potentially high level of volatility and risk in trading these contracts", Giancarlo adds. Instead, they only have to file a written self-certification with the regulator.

Bitcoin rebounded on Friday to hit the day's highs above $10,500 United States, recovering from an earlier dip below $9,500 USA, after the U.S. derivatives regulator said it would allow CME Group and CBOE Global Markets to list bitcoin futures.

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