Bitcoin Futures Launch But The Song Remains the Same

CBOE officially launched trading on bitcoin futures on Monday morning in Asia and while the event was much anticipated, price action has generally conformed to that of the past year with the price of the cryptocurrency rising steadily.

Trading on the front month contract started at $15,460 with the cash exchanges trading around $15,000, but after some early whippy price action that saw the price rise to $16,630 and then fall back to the opening level, a steady uptrend commenced which saw the contract trade above $18,000 before drifting lower to $17,700.

In a sight that will be familiar to bitcoin watchers the world over, the futures then jumped over $1,000 in a very short time to trade at a high of $18,700. This represents a more than 20% rise on the day, thus under CBOE contract specifications, a second trading halt for the day was instigated. Trading on the contract is halted for two minutes with a 10% move in the price from the previous close and for five minutes if the market moves 20%.

Although CBOE’s website struggled to cope with the level of traffic, the exchange says its trading systems were “working normally”.

Futures started trading at a premium of around 3% to the cash price on Gemini Exchange, the underlying asset from which the contracts are priced, however as the Asian day progressed this widened out to 5% or just under $1,000 above the Gemini price.

After the first five hours of trading on CBOE, futures were trading at $18,280, off the earlier high, while a bitcoin was worth around $16,800 on Gemini, meaning the futures premium had blown out further to almost 9%.

Trading volume on CBOE was 2080 contracts in the front month, seven in the second month and 18 contracts in the third.

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Twitter @Profit_and_Loss

Colin Lambert

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