Cboe Global Markets Inc. revealed today that it is to begin its bitcoin futures trading on the 10th December, beating fellow Chicago-based CME Group at becoming the first regulated exchange to trade the digital currency.
After receiving approval from the U.S. Commodities Futures Trading Commission (CTFC), in a press release, Ed Tilly, Chairman and Chief Executive Officer of Cboe Global Markets, said:
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. We are committed to encouraging fairness and liquidity in the bitcoin market. To promote this, we will initially offer XBT futures trading for free.
Bitcoin Futures Exchanges are coming in the near future
Similar to CME, Cboe’s bitcoin futures will be cash-settled; however, they will be based on the Gemini Trust, the digital currency exchange founded by Cameron and Tyler Winklevoss. On the other hand, CME will base their prices on four cryptocurrency exchanges, including Kraken, itBit, Bitstamp, and GDAX.
According to the release, trading will commence at 5:00 p.m. central time on Sunday, and Monday, 11th December, will be the first full day of trading. Through December, trading will be free, the release adds.
In a race to offer bitcoin derivative products via major exchanges, Terry Duffy, CME Group Chairman and CEO, revealed at the beginning of the month that it is to start trading on the 18th December.
At the time, Duffy said:
We are pleased to bring Bitcoin futures to market after working closely with the CFTC and market participants to design a regulated offering that will provide investors with transparency, price discovery, and risk transfer capabilities.
The news of Cboe and CME receiving approval from the CFTC means that it could attract more investors to the digital currency market. Not only that, but it will be a step closer to legitimising the cryptocurrency, which is often linked to criminal activities.
Furthermore, at present, bitcoin is bought and sold on exchanges that remain unregulated. Many, however, feel uncomfortable with this despite the fact that market prices are continuing to soar to record highs.
What they charge is critical. Transaction costs are relatively high for BTC. If this pushes transaction costs lower, it will be a benefit to the BTC market.
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