Bitcoin futures trading is underway on the CME exchange, and prices are falling

Picture: Getty Images

Bitcoin futures got underway at 10am AEDT on the Chicago-based CME exchange.

Early volumes have been light, and a short time ago around 460 contracts had changed hands on the most actively traded one-month forward contract.

A short time ago, one-month forward contracts expiring in January 2018 were trading at $US18,345 — a discount of $US1,155 from the opening price:

Source: CME Group

Bitcoin futures are derived from the underlying value of Bitcoin, and allow traders to bet on what Bitcoin will be worth at a specified future date.

CME is the world’s largest futures exchange, which is expected to add more liquidity to the market after last Monday’s launch of future’s trading on the Cboe exchange.

Cboe futures are based of Bitcoin value on just one exchange — the Gemini exchange, founded by the Winklevoss twins — while CME futures will be based off four exchanges.

“This market should see way bigger volumes. CME is a way bigger player in futures than cboe,” John Spallanzani, chief macro strategist at CFI Group, told Business Insider.

Once CME futures trading commenced this morning, the underlying value of Bitcoin on the composite index provided by coindesk.com was initially little-changed at a value of around $US19,260.

Since then, prices declined to as low as $US18,230.92.

This 5-minute chart via investing.com shows the morning price-action in the underlying value of Bitcoin on the Kraken exchange:

Garrett See, the CEO of cryptocurrency trading firm DV Chain, told Business Insider that early volumes were similar to those seen on the Cboe exchange last week.

“The order book is thin. The CME futures are trading at a premium to Cboe futures, but the premium has come in a bit since the open,” See said.

One CME futures contract is equal to five Bitcoin, whereas each Cboe futures contract is equal to one Bitcoin.

The CME exchange may see higher volume overnight as markets open on Monday morning in the US.

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