CME Group, the world’s largest FX and derivatives marketplace, today announced its intention to list Bitcoin futures trading in Q4 of 2017, pending regulatory review.
The group already offers futures and options on a multitude of asset classes such as “interest rates, equity indexes, foreign exchange, energy, agricultural products and metals.”
The news propelled Bitcoin to a new all-time high, currently over $6414.00 on BitStamp.
With Bitcoin, CME plans to offer cash settled contracts that refer to their Bitcoin Reference Rate (BRR), a once-a-day reference rate for Bitcoin-to US-dollar conversions.
CEO of the CME Group ,Terry Duffy, commented on what he saw as Bitcoin’s easy fit with other asset classes on the CME platform.
“As the world’s largest regulated FX marketplace, CME Group is the natural home for this new vehicle that will provide investors with transparency, price discovery and risk transfer capabilities.”
CME began publishing their BRR a year ago in November 2016 using Bitstamp, itBit, Kraken and GDax to calculate the daily rate. At the time the group also teamed up with Crypto Facilities Ltd to provide a real time price index called the BRTI (Bitcoin Real Time Index) which “combines global demand to buy and sell bitcoin into a consolidated order book and reflects the fair, instantaneous U.S. dollar price of bitcoin in a spot price.” Another consultant on CME’s Bitcoin pricing product team was Mastering Bitcoin author and speaker Andreas Antonopoulos.
With the “increasing client interest” in cryptocurrencies and the the explosion of total market cap in the sector to over $170 billion it is a move that takes Bitcoin into the realm of big time trading. CME touts itself as the place “where the world comes to manage risk,” averaging “3 billion contracts worth approximately $1 quadrillion annually.”
Futures News Spreads Quickly, BTC Price Surges In Response
The crypto community went into a frenzy over the CME announcement, with this reality being reflected in BTC’s price.
Bitcoin surges to record after CME announces launch of futures for digital currency https://t.co/XLFtEps6zH
— Chris Ellis (@MrChrisEllis) October 31, 2017
Industry figures like Max Keiser have been saying for some time that the tide will change once Wall Street has some skin in the game.
— ☣️ BITCOIN MAXIMALIST (@maxkeiser) October 31, 2017
Of course for all the excitement that futures trading brings among the Bitcoin faithful, there is always a cautionary aspect to the news
— The Artist Formerly Known As Klendathu Capitalist (@KlendathuCap) October 31, 2017
Yet overall, on the day after the 9th anniversary of the release of Satoshi’s seminal whitepaper, this is a big, big news. For the cryptocurrency industry it formally introduces Bitcoin as an asset class, offering it to businesses and institutions as an instrument they can use to manage risk and profit from its growth.
What’s your take? Do you think CME’s BTC futures will pour a ton of money into the crypto space? Let us know what you think in the comments below!
Images via BitStamp, mrtopstep.com