BTC is rising to new highs as further developments happen in the fictionalisation of BTC. CME Group, the world’s largest futures exchange posts announcement.

CME Group Inc (CME.O), the world’s largest derivatives exchange , mistakenly confirmed that it will launch a Bitcoin futures market effective December 10, the date would have made for a significant milestone in the history of BTC, paving a path for the further legitimization of bitcoin and cryptocurrencies in general.

Bitcoin has hit a high today at about $8,250, they surpassed new heights yesterday on account of the futures date set by CME.

There was a statement posted to the CME website stating that

“Effective Sunday 10 December 2017 for trade date Monday 11 December 2017, and pending all relevant regulatory review periods, please be advised that CME will launch Bitcoin Futures,” explains CME Group’s most recent update.

But a further update stated in the FAQ section went onto note “CME Group plans to launch Bitcoin futures contracts in Q4 2017, pending regulatory review and certification.”


The Error

As reported by Reuters, many cryptocurrency news websites were excitedly reporting the increased price level of BTC on the update made by the world’s largest derivatives exchange stating their contract would go for trading on Dec.11, based on regulatory review.

The exchange later made a correction and a representative, Laurie Bischel, from the company later clarified that the initial posting “was due to an error with the website”.

There is a current race to get to the finish line and release the contracts between the regulated companies in this space, CME & Cboe Global Markets. Neither of them want to be last to the market and are making every effort to deploy these contracts.

The asset, bitcoin has experienced various amounts of volatility yet has seen its price by above 50% in just the past few days, leading other regulators to cry “bubble”.

According to CME, it plans to bring in some stability to the currency by not allowing for the trading of bitcoin futures at prices above 20% or below the settlement price from previous day.

The exchange has not yet filed with U.S. Commodity Futures Trading Commission to launch the bitcoin futures.

Their competitor, Cboe stated the same but added that they are actively speaking with the regulator.

For Cboe, receiving permission from the CFTC and releasing the futures contract would only be the first step in a larger plan to launch an etf driven by BTC prices.

“CFTC regulations allow designated contract markets such as CME to list products for trading without prior CFTC approval by filing a written self-certification with the regulator, meaning CME stipulates the product complies with the Commodity Exchange Act and CFTC regulations.

To self-certify a new product, the exchange must file its submission with the CFTC by the open of business on the business day before a product is to be listed.”



Details of the contract

This new sort of contract will be settled in cash, and it will be based on the CME CF Bitcoin Reference Rate (BRR), according to the CME website, a “Once-per-day reference rate on the U.S. dollar price of bitcoin”.

CME Bitcoin futures are based on the CME CF Bitcoin Reference Rate (BRR), which aggregates bitcoin trading activity across major bitcoin spot exchanges between 3:00 p.m. and 4:00 p.m. London time.

The futures will be listed and cleared on their site as they are a US-registered designated contract martket and derivatives clearing organization.

These futures for bitcoin will be listed on their website in month per month contracts for the nearest two months in the March quarterly cycle (Mar, Jun, Sep, Dec).

Contract Unit : 5 bitcoin, as defined by the CME CF Bitcoin Reference Rate (BRR)

Min Price Fluctuation: Outright: $5.00 per bitcoin = $25.00 per contract

Calendar Spread: $1.00 per bitcoin = $5.00 per contract

Trading Hours: CME Globex and CME ClearPort: 5:00 p.m. – 4:00 p.m. CT Sunday – Friday

Position Limits: Spot Position Limits are set at 1,000 contracts. A position accountability level of 5,000 contracts will be applied to positions in single months outside the spot month and in all months combined.  The reportable level will be 25 contracts


Why is this news exciting?

These exchanges have established themselves as significant players in the market and if they see long term potential in bitcoin that’s a strong signal to the world in the validation of bitcoin. This provides benchmark for bitcoin making it established as a new asset class adding more regulation to the sector.