Trading in Bitcoin futures on the Chicago-based Cboe exchange commenced this morning at 10:00am AEDT (Australian time).
And futures traders took a bullish stance on the cryptocurrency, as underlying bitcoin prices rose steadily throughout the day.
Shortly after midday AEDT, a total of 890 futures contracts had been traded, the Cboe exchange said in a press release.
And the table below from the Cboe website shows futures traders are optimistic about future price increases.
The most commonly traded one-month contract — expiring on 17 January 2018 — is currently priced at $US17,840, up from an opening price of $US15,000:
The Cboe Bitcoin contract -which uses the ticker XBT — is based on prices from Gemini, a cryptocurrency exchange founded by the Winklevoss twins.
“The volumes and flow traded are actually reasonable, and by 4:15 AEDT just over 2310 trades had taken place, representing a notional USD value of over $39.1 million,” said Chris Weston from IG markets.
“Many have complained that the order book has been thin, but it was never going to be anything else and the ability to move price around in this environment with a reasonable buy or sell order is something futures traders will have to get used to,” he said.
Cboe announced that its website had temporarily crashed shortly after trading began.
And on two separate occasions, the exchange enforced a trading halt — initiated automatically if prices move up or down by more than 10%.
Underlying prices for Bitcoin rose by more than $US1,000 in just a few minutes after the futures market opened, before declining to around $US15,000.
However, a short time ago prices were elevated near all-time highs at $US16,294.62, according to data from Coindesk.
Today’s activity marked Bitcoin’s entry into the world of regulated markets, ahead of the first full day of US trade tomorrow.
Next week, futures markets are scheduled to open on the larger CME exchange, which may provide a vehicle for futher insitutional investor interest.
“There obviously needs to be greater participation from the institutional players, and this will come with client demand,” Weston said.
“Attract the hedge funds and other big money players and we will see a far more efficient and functioning marketplace.”
“So what we have seen today is the start of a long process, but it should be seen as a significant one in the evolution of the cryptocurrency trading space.”
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