Forex - Dollar Steady, Bitcoin Surges as Futures Trading Starts

Cheryl Sanders
December 11, 2017

As of Sunday evening, the price of a single bitcoin was about $15,200, according to data from CoinDesk, which values bitcoin based on data from four exchanges.

The first-ever bitcoin future jumped after it began trading Sunday as the increasingly popular virtual currency made its debut on a major USA exchange.

Prices of the CBOE Bitcoin futures contracts, which expires in January, jumped to $18,800 (£14,000) today morning, from $15,000.

The CBOE futures don't involve actual bitcoin. First, the launch of bitcoin futures by establishment firms is likely to to open the door to wider participation in bitcoin trading by other Wall Street firms. After making a journey towards the $500 region, we are now seeing the prices back below the $450 region and it looks as though this consolidation and ranging would continue.

It marks the first opportunity for professional traders to invest in bitcoin, even as some steer away because of a lack of regulations surrounding the currency."It gives it legitimacy".

The two launches were made possible after a key USA regulator, the Commodities and Futures Trading Commission (CFTC), gave the green light to the exchanges on December 1, while warning "of the potentially high level of volatility and risk in trading these contracts".

Securities brokers in South Korea, which were gearing up to introduce bitcoin futures trading to their clients, halted the process for now.

The new record high comes just days before the launch of Bitcoin futures on two exchanges, including the world's largest futures exchange, CME.

Bitcoin's wild swings occurred as the financial community prepares for bitcoin futures to start trading on Sunday on the CBOE and a week later on the Chicago Mercantile Exchange. This person requested anonymity because the decision hasn't yet been disclosed publicly. This group includes JPMorgan Chase, Bank of America Merrill Lynch, Citigroup, Barclays, Morgan Stanley and Societe Generale, said people close to the matter. They will allow trading based on the movements in the prices of the cryptocurrency, without any ownership of the currency itself.

"We are commissioning only the select clients who have experience in bitcoins", he said. The futures will allow for the shorting of bitcoin - that is betting that the price of bitcoin will go down - which presently is very hard to near impossible to do.

Some leading economists and financiers are calling bitcoin a bubble and a fraud, but industry insiders say they think it's only going to get bigger as it gains more widespread acceptance. They are basically lines of computer code that are digitally signed each time they are traded.

Bitcoin's manic run-up this year has boosted volatility far in excess of other asset classes. Others say they can be helpful methods of payment, such as in crisis situations where national currencies have collapsed.

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