The CEO of CME, Terry Duffy, says that investors who wish to bet against the price gains of Bitcoin will be able to do so in mid-December with the launch of the firm’s Bitcoin futures exchange.
Bitcoin’s march to acceptance as a legitimate investment asset continues. The latest example of this is that CME has announced that their Bitcoin futures exchange will open for business in mid-December. Those of you waiting with baited breath to short Bitcoin will finally be able to do so.
Betting on Bitcoin Futures
Back on Halloween, CME announced that they would launch a Bitcoin futures exchange by the end of the year. Pending regulatory review, this will become a reality in a few short weeks.
On the Power Lunch program on CNBC, Terry Duffy, the CEO of CME, said:
When can you be able to short this product, I think sometime in the second week in December you’ll see our contract out for listing.
Terry Duffy then went on to add:
I’m not trying to rein in the volatility of Bitcoin. But what I want to do is give it a place for other people to lay out that risk. Today you cannot short Bitcoin. So there’s only one way it can go. You either buy it or sell it to somebody else. So you create a two-sided market, I think it’s always much more efficient.
Bitcoin Gaining Respectability
Quite a few people are looking at the launch of the CME Bitcoin futures exchange as a sign of greater acceptance, and I see no reason to argue with them. CME is the world’s largest futures exchange, so it’s pretty obvious they know what they’re doing. Now investors can dabble in cryptocurrency without actually having to own any.
CME says that the futures contract will be cash-settled based upon the daily settlement price by the CME CF Bitcoin Reference Rate (BRR), which tracks a number of major Bitcoin exchanges. An interesting tidbit is that the company’s system of “velocity logic functionality” may halt the futures exchange if Bitcoin’s value is fluctuating wildly.
And there’s good reason for this. It’s been a wild and wooly ride for Bitcoin enthusiasts over the last week. The long-anticipated fork, SegWit2x, was cancelled, and the price of Bitcoin fell sharply over the weekend. Then the digital currency surged $900 on Monday.
In the end, it’s great to see more financial institutions getting involved in cryptocurrency, even though a number of them are still proclaiming doom and gloom (we’re looking at you, Jamie Dimon!).
Are you happy to see the launch of CME’s Bitcoin futures exchange launching in mid-December? Do you think more financial giants will jump on the cryptocurrency bandwagon? Let us know in the comments below.
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