Bitcoin rebounds after USA regulator approves futures

Bitcoin rebounds after USA regulator approves futures”

The Chicago Mercantile Exchange will launch its bitcoin futures contracts on December 18.

The CFTC's Chairman, J. Christopher Giancarlo said: "Bitcoin, a virtual currency, is a commodity unlike any the Commission has dealt with in the past".

The Commodities Futures Trading Commission, the primary regulator for exchanges like the CME, gave approval for the exchange to create bitcoin futures after six weeks of discussions.

Still, putting futures contracts on highly scrutinized US exchanges could convince other regulators to allow more cryptocurrency-derived products such as exchange-traded funds. The impending launch date of Cboe bitcoin futures, which will trade on CFE under the ticker symbol 'XBT, ' will be announced shortly. Variation margin will also be charged to cover daily mark-to-market moves.

It has been a volatile week for the biggest and best-known cryptocurrency. "I actually believe that national currencies will begin issuing digital currencies". It was a natural step in the development of a market that is already growing rapidly, and the ability to bet on declines as well as gains may help smooth some of the volatility, he said.

Cboe Global Markets Inc. will also be dealing with the cryptocurrency, but hasn't said when it will start.

Still, at launch, Duffy explained the bitcoin futures product will be subject to risk management tools, including a margin of 35 percent, position and intraday price limits.

The price of bitcoin futures will be based on the price the digital currency is going for on four major bitcoin exchanges - Bitstamp, GDAX, itBit and Kraken. Both contracts will be priced against and settled in the cash bitcoin market. While the regulator fears market manipulation by market participants in the cash bitcoin market, crypto enthusiasts are fearful of the government and traditional Wall Street taking over the asset class.

Bitcoin, which had been trading at around $10,150 United States on the Luxembourg-based Bitstamp exchange before the news, jumped following the news, leaving it up more than six per cent on the day.

Bitcoin futures trading can go ahead on three USA exchanges, the Commodity Futures Trading Commission said on Friday.

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