The introduction of futures from both Cboe and CME may entice more professional traders and investors to join the cryptocurrency market by shifting transactions onto regulated exchanges.
The settlement price, to be called the CF Bitcoin Reference Rate, will be based on the volume-weighted average price of trades between 3:59 p.m. and 4 p.m. London time every business day, CME said.
The Chicago Board Options Exchange (CBOE) has announced that its planned bitcoin futures product will begin trading on december 10. The first bitcoin futures contracts on a regulated US exchange are set to launch on Sunday.
"Given the unprecedented interest in bitcoin, it's vital we provide clients the trading tools to help them express their views and hedge their exposure", stated Ed Tilly, CEO of CBOE. Bitcoin's market capitalization reached $192.3 billion on Monday afternoon Beijing time, as the price of the cryptocurrency surged to $11,503, according to data provider CoinMarketCap.
Denis Baranov, a principal consultant at technology consultancy DataArt, says some bitcoin exchanges already offer futures, but the support of a major exchange could boost bitcoin's legitimacy. But there are a couple of differences between bitcoin futures trading at the two exchanges.
The launch confirmation comes months after the Chicago-based exchange first detailed its plans to create a bitcoin futures product.
The announcement from the Commodity Futures Trading Commission (CFTC) that it will allow the futures to be traded was seen as a watershed moment for the currency. CBOE has already expressed its desire to list these products, and - just this week - The Wall Street Journal reported Nasdaq Inc. hopes to list bitcoin futures on one of its US exchanges during the first half of 2018.