CBX Weekly Newsletter // 15 Jan 2020
- Bitcoin Hits $8,900
- CME Takes Its Bitcoin Options Live
- The chairman of the (CFTC) believes regulated derivatives will instill market confidence in cryptocurrencies.
Bitcoin Hits $8,900
Bitcoin hits a new high for this year reaching $8,900 on CBX and other major exchanges.
Other Altcoins such as Litecoin (LTC) have seen almost double the gains of Bitcoin in the past trading weeks.
This comes several hours after the successful launch of Chicago-based derivatives exchange CME’s futures contracts for BTC, which surpassed rival Bakkt in reported volume within its first day of trading.
Global Head of crypto trading giant Cumberland, Chris Zuehlke said institutional investors are seeking traditional risk management tools to support greater entry into crypto.
“As with any new financial product, we expect volume will grow organically as investors get more comfortable trading it,” Zuehlke said.
An option on a futures contract gives a holder the right, but not the obligation, to buy or sell a specific futures contract at a strike price on or before the option’s expiration date.
CME Takes Its Bitcoin Options Live
Options on CME’s bitcoin futures contracts launched on the CME Globex. Each contract, quoted in U.S. dollars, represents five bitcoin. CME relies on trade flow data from several of the large bitcoin exchanges to accurately track bitcoin’s price.
Bitcoin derivatives have been available on multiple cryptocurrency exchanges since at least 2014, but CME was one of the first platforms to offer investors regulated products when it first launched its cash-settled bitcoin futures in December 2017.
Bitcoin options had a strong start to 2019. Last week, daily volumes surged to surpass $90 million by Friday, according to data collected from analytics firm Skew.
The chairman of the (CFTC) believes regulated derivatives will instill market confidence in cryptocurrencies.
Chair Heath Tarbert said that his agency is helping create a regulated futures market.
“By allowing cryptocurrencies to come into the world of the CFTC,” investors can better access trusted and regulated financial products, improving overall confidence in the asset class, according to Tarbert. “It’s helping to legitimize digital assets, in my view, and add liquidity to these markets,” he said.
In the interview, Tarbert reiterated that his perspective will only extend to cryptocurrencies the CFTC currently classifies as commodities. Appointed chairman last April, he has advocated for an open regulatory regime when it comes to cryptocurrencies.
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