The impending launch date of Cboe bitcoin futures, which will trade on CFE under the ticker symbol 'XBT, ' will be announced shortly.
The CME announcement came as the Commodity Futures Trading Commission said it will allow the world's largest futures exchange and its competitor, the Cboe Futures Exchange, to launch bitcoin contracts.
CFTC Chairman Christopher Giancarlo warned investors, however, that the nascent underlying bitcoin cash markets remained largely unregulated and mostly beyond the commission's purview.
The CME futures contract could also mean less volatility for bitcoin because it will implement some controls, such as circuit breaks, that will halt trading following steep price swings.
The bitcoin price rallied to a 24-hour high following the announcement that USA derivatives exchange CME has self-certified to list bitcoin futures contracts in mid-December. "As a result, we have had extensive discussions with the exchanges regarding the proposed contracts, and CME, CFE and Cantor have agreed to significant enhancements to protect customers and maintain orderly markets". While CFTC approval isn't required, the regulatory body could have halted the CME's plans if it wasn't satisfied with the self-certification. "At launch, our new bitcoin futures contract will be subject to a variety of risk management tools, including an initial margin of 35%, position and intraday price limits, and a number of other risk and credit controls that CME Group offers on all of its products".
Cboe said they are "operational ready".
The regulator will monitor trading in these products and will assess whether any changes are needed to the contract design and settlement processes.
These new derivatives open the doors for institutional investors, as well as introducing the possibility of more cryptocurrencies becoming available in the future.
Bitcoin soared above $11,000 for the first time this week, up tenfold year-to-date and prompting multiple warnings of a bubble.
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