CME Launches Bitcoin Futures Sunday Afternoon!

Posted Friday, December 15, 2017 by
Shain Vernier • 2 min read

On the heels of last weekend’s launch of Bitcoin (BTC) futures by the Chicago Futures Exchange (CFE), the CME Group is following suit this Sunday afternoon. The Dec. 17 electronic open will feature BTC futures for the first time on the CME Globex platform.

BTC Futures Have Come To America!

The CME contract will be much larger than the CFE offering, with value based on an underlying asset of five BTC. The minimum price fluctuation will be $25 per tick. BTC values will be based upon the CME’s Bitcoin Reference Rate (BRR). In anticipation of BTC’s volatility, the CME has raised initial and maintenance margin requirements substantially.

In short, it is going to cost substantial money to trade CME BTC futures. High margins and a $25 tick size will eliminate most retail traders. Nonetheless, if you are going in with guns blazin’, best of luck!

Will Anything Happen To Bitcoin’s Value?

Before the CFE launch, we observed a considerable rally in the BTC cash market. Altcoins such as Ethereum, Litecoin, and Ripple also posted big gains. This week has brought more of the same to cryptocurrencies, with BTC experiencing a slower rate of growth near 9%.

It is anyone’s guess what will happen to BTC’s cash value upon Sunday’s launch. The size of the CME contract makes it an ideal hedging tool for the big players in the BTC market. Institutional money will account for a lion share of traded volumes, which will create choppy intraday price movements.

Shortly after the market opened, the CFE saw limited volumes with huge swings in pricing. Trade was halted twice as price rallied 20% in short order. Technical issues caused platform outages on several occasions. While the CME is a much bigger exchange, I expect technical glitches and crazy price action to define early trading.

If CME BTC futures are too rich for your blood, there are opportunities to be had in the CFD cryptocurrency market. To become active in these volatile markets, find a reputable broker and head over to the signals page for trade ideas!

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