Traders, start your engines. The first bitcoin futures contracts on a regulated U.S. exchange are set to launch on Sunday.
In an unexpected development, the Chicago-based Cboe Futures Exchange (CFE) has announced it will list bitcoin futures contracts for trading on December 10. The futures will begin trading at 5 p.m. CT under the ticker symbol “XBT”.
The move is clearly intended to steal the thunder from fellow Chicago derivatives exchange CME, which announced on Friday that it will list bitcoin futures on December 18. Consequently, Cboe will become the first U.S. exchange to support trading for a cryptocurrency-derived futures product.
“Given the unprecedented interest in bitcoin, it’s vital we provide clients the trading tools to help them express their views and hedge their exposure. We are committed to encouraging fairness and liquidity in the bitcoin market,” said Ed Tilly, chairman and CEO of Cboe Global Markets, in a statement.
The contracts will be cash-settled, and the price will be based on the daily auction price from Gemini, a cryptocurrency exchange based out of New York. Cboe will waive trading fees for these products for the duration of December.
“Developing a regulated derivatives market is the next logical and crucial step towards advancing the broader digital asset market. We have been working for years to build infrastructure to grow the digital asset market and today’s news marks a significant milestone,” said Tyler Winklevoss, CEO of Gemini.
Although the futures have yet to begin trading, Cboe president Chris Concannon has already hinted that the exchange may soon launch futures contracts for ether and bitcoin cash, according to a Business Insider report.
Last week, a JPMorgan global markets strategist forecast that the introduction of bitcoin futures would legitimize cryptocurrency in the eyes of both institutional and retail investors, transforming the cryptocurrencies into “an emerging asset class.”
Following the launch of these products, many analysts predict that the Securities and Exchange Commission (SEC) will grant approval to the first exchange-traded fund (ETF) that invests in bitcoin futures contracts, potentially turning bitcoin into a mainstream financial instrument and portfolio asset.