Launch of bitcoin futures on CBOE exchange sends price of cryptocurrency higher
Bitcoin prices were pushing towards $17,000.
Bitcoin prices have climbed after Chicago’s CBOE exchange launched cryptocurrency futures trading, following regulatory approval by US authorities earlier this month.
Bitcoin was up more than 10% at $16,623 (£12,419) in morning trading on Monday, according to Coindesk.com, which is one of a number of exchanges tracking the digital currency’s price.
It marks a 1,600% rise since the start of the year, when Bitcoin was trading at around $968 (£723.19), and a 157% rise since November 1st.
Advocates say the launch of futures by major US exchanges helps legitimise bitcoin’s use and stands to lower volatility levels – as recent price swings have raised questions over whether valuations of the digital currency are justified.
But there may be prospect for further milestones over the next week, with the Chicago Mercantile Exchange (CME) set to launch its own bitcoin futures trading on Monday December 18.
Nasdaq is also considering offering Bitcoin futures in early 2018.
CBOE futures were pointing to bitcoin prices pushing to $17,500 (£13,071) by mid-January, and rising to $19,100 (£14,264 ) by mid-March 2018.
Hussein Sayed, chief market strategist at online broker FXTM, said the futures launch marked a “new phase” for the cryptocurrency.
“The initial reaction was beyond expectations with the futures contract climbing more than 20% and triggering two trading halts. CBOE’s website experienced unprecedented traffic which may well have set a new benchmark.”
He added: “So far, it seems professional investors aren’t willing to bet against the bitcoin, despite the many warnings of a bubble that will burst soon.”
Major players in financial services have hit out at the cryptocurrency in recent months, with JP Morgan boss Jamie Dimon calling bitcoin “a fraud”, adding that he would fire employees found to be trading the digital currency for being “stupid”.
Meanwhile, a number of global authorities have started to crack down on the virtual currency amid rising concerns about money laundering, hacking and tax evasion.
There are worries over the lack of regulation – as no Government or authority has jurisdiction over its use – and the fact that transactions are encrypted and hard to trace.
The Treasury has said it now intends to regulate the digital currency, as part of EU-wide plans that will require online platforms that trade in Bitcoin to carry out due diligence on customers and report suspicious transactions.
But supporters of the crypto-currency argue that the virtual money can be abused in just the same way as cash and credit card payments, and say products like Bitcoin can open the door for economic participation for billions of consumers.
The head of the International Monetary Fund (IMF), Christine Lagarde, has admitted that cryptocurrencies could be a useful tool, being potentially “easier and safer” to hold than paper bills in remote regions, or countries with unstable national currencies.