Bitcoin Forum

$51 Billion CME to Enable Bitcoin Futures Trading by December 18

CME Group, the $51 billion US-based financial institution and the world’s largest options exchange, is set to finalize the integration of its bitcoin futures exchange by December 17, and open bitcoin futures for trading by December 18.


CME Receives Approval From CFTC

In an official announcement, Terry Duffy, CME Group Chairman and CEO, revealed the company has received the approval from the US Commodities and Futures Trading Commission (CFTC) to list bitcoin futures and provide infrastructure around bitcoin options, derivatives, and futures contracts.

In the first few weeks of operation, traders on CME’s bitcoin futures exchange will be limited to initiating trades with an initial margin of 35 percent. Various risk management tools have been implemented onto CME’s bitcoin futures trading platform, given that it is a strictly regulated exchange overseen by the CFTC.

Duffy stated:

“Though we have worked through a lengthy, comprehensive process with the CFTC to get to this point, we recognize bitcoin is a new, uncharted market that will continue to evolve, requiring continued collaboration with the Commission and our clients going forward. At launch, our new Bitcoin futures contract will be subject to a variety of risk management tools, including an initial margin of 35 percent, position and intraday price limits, and a number of other risk and credit controls that CME Group offers on all of its products.”

The CME bitcoin futures platform rely on the CME CF Bitcoin Reference Rate (BRR) to obtain the global average price of bitcoin based on Bitstamp, GDAX, itBit and Kraken. These four cryptocurrency exchanges are well-regulated within the US and Europe, and are fully compliant with the regulatory frameworks established by respective governments within the two regions.


CME’s Impact on Bitcoin’s Mid-Term Growth

On November 14, CCN reported that the UK-based $100 billion hedge fund Man Group has announced its official plans to invest in bitcoin and commit to the bitcoin market upon the completion of CME’s bitcoin futures exchange launch.

Man Group CEO Luke Ellis told Reuters:

   “Conceptually digital currencies are an interesting thing. It’s not part of our investment universe today – it could be. If there is a CME future on bitcoin, it would be.”

Large-scale hedge funds with a market valuation of over $10 billion typically have a minimum investment threshold in the range of $300 to $500 million. Hence, if large-scale hedge funds like Man Group invest in the bitcoin market, tens of billions of dollars in institutional money will flow into bitcoin, increasing liquidity of the digital currency.

Ellis and executives of other major hedge funds such as Fidelity Investments, a US-based investment firm with $3.23 trillion assets under management, have expressed optimism in regards to the decentralized structure of bitcoin and its transparent nature which enables it to operate as a robust store of value and a fair monetary system.

“There is a big difference between a digital currency and a traditional currency…Traditional ones are supported by governments who have armies and tax men that can make people follow their rules, and digital ones don‘t. But that doesn’t invalidate digital currencies at all,” said Ellis.

As large sums of institutional money flow into the bitcoin market and companies within the traditional finance sector continues to adopt bitcoin, in the mid to long-term, the mainstream adoption of bitcoin will inevitably surge at an exponential rate. 


Source: https://www.cryptocoinsnews.com/51-billion-cme-enable-bitcoin-futures-trading-december-18/

I think the price will be more VOLATILE when CME Bitcoin Futures Trading have been enabled. We should all be ready for a rocky road of ups and downs on price of Bitcoin and we should get ready ourselves for Big FUD about Bitcoin, I also believe that Bitcoin will be hyped up before the CME Bitcoin futured launch-- which is already happening now.

Bitcoin's journey is now entering a much more exciting phase and this is just the start as other exchanges and financial institutions are also readying their own versions of futures contracts and there would be many who will enter the Bitcoin market once CME has already operated its platform for Bitcoin. Will this mean more volatility? It can be possible but I would prefer to wait and see how things will work out. Definitely, with Bitcoin we are just barely scratching the surface and there would be more exciting things to happen especially in 2018 -- predicted to be one of the best years for Bitcoin!

We might be low life beggars here but we are not stupid to let them jump us like this, they are trying to collect every Bitcoin in circulation to centralize it, they could take the throne from people, please don't sell your coins under $500,000 if they have the approval of the government, they can surely have the printing machines as well, let them beg for Bitcoins. exponentially loling.

That's a problem if people sell their bitcoin at a lower price, we can't assure people not to sell bitcoin until it reaches $500,000 due to everyone has different needs. But, I agreed with the idea of hold bitcoin instead of selling it, until the time I can spend my bitcoin directly to the merchants in my city as easy as using fiat currency. Bitcoin meant to be a currency obviously, not as a speculative object for big whales to monopolize the market with all of their tons of cash.

Bitcoin future is never ending. CME found that and believe on its potentials. Why would they put something if it will be gone and nothing in the future.
Some big names in the financial industry, stated negative comments about BTC. They said BTC is a fraud.  I don't think they got it right. Look at it now, BTC, which is an assets in virtual world will be included on the list of CME. We really don't know. It will be more than what we imagine now.

It strengthen my belief that BTC will be forever dominating in crypto world.

Guess someone want to be first to add Bitcoin
https://news.bitcoin.com/cboe-beats-cme-market-will-launch-bitcoin-futures-december-10/

Ed Tilly, Chairman and Chief Executive Officer of Cboe Global Markets, said: “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. To promote this, we will initially offer XBT futures trading for free.”

Because they would rake in some fairly hefty exchange fees (http://www.cmegroup.com/company/clearing-fees.html) from listing it.

Provided that an exchange wouldn't completely destroy their reputation by listing something (they wouldn't by listing BTC) they have a very clear incentive for listing whatever people are willing to trade.  It doesn't necessarily prove that BTC is doing better or that the price will remain high.

This incentive is strengthened by the fact that BTC has a very high trading volume and it could potentially be easy to manipulate the price with huge amounts of money (on their exchange).

EDIT: for now, they're offering it for free.  But I suspect that'll only be the case for as long as they want to stay extremely competitive, so that they can get frequent customers to begin charging later.

I have hard time deciding whether this will be good or bad for the bitcoin and cryptocurrency ecosystem. So I will also wait and see how this will impact bitcoin or if it will impact bitcoin at all. I wouldn't dare to say exciting things are about to happen, as this could make the price plummet as well, but things are getting more interesting by the day that's for sure.

Exchanges are very opportunistic when it comes to listing certain assets. If there's a (big) demand for it, depending on the scale of the exchange, there's a chance they will list it. Because at the end of the day they don't want customers to move to a competitor.
Since futures contracts will allow for big hedge funds and big investors to enter the scene, I wonder if this will/can influence the real price of bitcoin at all.

So what will happen when we have a fixed amount of bitcoin and around 80% are used for saving for future profit and only 20% are circulating? When the futures comes then the market we have hunger for more coins to speculate with and the demand will rise the price a lot.

Obviously, the price will go up even further. The more coins we take out of circulation, the less availability there is of on-market coins, and for that reason the higher the price will be. Great example is Zimbabwe. Bitcoin's price reached almost $18,000 last week, which is only the result of the high demand, but very limited supply. In order to obtain Bitcoin there, people have to buy at any given market rate, which is something they are doing without hesitation due to the horrible situation in that country, and there is no sign of improvement. I am for that reason interested in the current price there, but don't know where to look, and articles covering this only pop up from time to time.

is it ok to buy bitcoin before the trading launch, or because of this news there is a hype so the price is high?