CBOE’s bitcoin futures continue to trade near $18,000 as “speculative mania” prevented bears from immediately shorting the market.
CBOE Bitcoin Futures Launch: Afternoon Update
As CCN reported, CBOE launched its hotly-anticipated bitcoin futures contracts on Sunday, becoming the first regulated U.S. exchange to provide traders and investors with access to this product. Though volume was much lower than activity on bitcoin exchanges — in part due to the fact that many brokers restricted client access — a CBOE executive noted that its volume was quite respectable when placed in the context of other nascent futures products.
On the first day of trading at @Cboe in 1973 911 options traded. First day of $VIX futures in 2004 saw 461 contracts traded. 3 hours into the first #bitcoin futures session and volume is just over 1000 contracts.
— Russell Rhoads (@RussellRhoads) December 11, 2017
The launch was not without its hiccups. Bitcoin’s rapid price swings flipped CBOE’s “circuit breaker” on several occasions, bringing temporary pauses to trading after reaching certain percentage checkpoints. Additionally, there was so much interest in the futures that the CBOE website crashed, but this outage did not directly affect trading.
Bitcoin Futures Trade Up Post-Launch
Although some bitcoin bears had loudly declared that the creation of futures would cause the bitcoin price to crash, the flagship cryptocurrency traded up during its first day on CBOE.
At the time of writing, GXBT — the index price for the futures contracts — was listed at $16,522, placing it $276 below its daily high. Volume had already surpassed 3,550 XBT, with most of that activity concentrated in XBT/F8, a contract with a January 17 settlement date. The January futures traded as high as $18,850 on Monday morning, but they were priced at $17,710 at the time of writing, representing approximately $1,200 worth of upside from the index’s present value.
February (XBT/G8) and March (XBT/H8) futures saw considerably less volume, but each of those products traded above $19,000 before settling down to present values of about $18,000.
Commenting on the initial price movements, billionaire hedge fund manager Mike Novogratz stated that it gave him the impression that, despite bitcoin’s meteoric year-to-date increase, the rally was still in its early stages.
“The market trades like it wants to go up, not down,” Novogratz, founder of crypto hedge fund Galaxy Investment Partners, told Bloomberg. “We are in a speculative mania and my sense is we are still fairly early.”