First U.S. Bitcoin Futures to Start Trading Next Week -- Update

By Alexander Osipovich 

The first U.S. bitcoin futures will start trading next week, as dueling Chicago futures exchanges seek to cash in on surging investor interest in the digital currency.

Cboe Global Markets Inc.'s new bitcoin futures will go live at 5 p.m. Central time on Dec. 10, with the first full day of trading set for Dec. 11, the firm said Monday.

That gives Cboe a head start on CME Group Inc., its larger crosstown rival, which plans to launch its own bitcoin futures on Dec. 18. The U.S. Commodity Futures Trading Commission on Friday allowed both exchange operators to go forward with bitcoin futures.

Cboe is working with online brokerages to allow retail investors to start trading its bitcoin futures as soon as possible, a spokeswoman for the company said.

Bitcoin futures would allow traders to bet on rises and falls in the digital currency, similar to the way oil, corn or gold futures work. The emergence of bitcoin futures could make it easier for both Wall Street banks and small investors to trade bitcoin.

A huge price run-up this year has sparked intense investor interest in bitcoin, which soared to more than $11,800 at one point on Sunday, up more than 12-fold from the beginning of 2017, according to CoinDesk.

Still, many financial institutions remain wary of bitcoin due to its volatility, uncertain regulatory status and lingering association with illicit activity. Skeptics call it a bubble.

Announcements by Cboe and CME that they would seek to launch bitcoin futures were seen as a vote of confidence in the digital currency. Cboe was the first to unveil its plans, in August, while CME followed suit in October.

The race between the two rivals could determine which exchange establishes the dominant bitcoin futures contract. CME is the world's largest exchange company, with a market capitalization of $51 billion and roots going back to the mid-19th century.

Cboe, worth $14 billion, was founded in 1973 as the Chicago Board Options Exchange. Its first trading floor was a space that had once been the smoking lounge for the Chicago Board of Trade -- an exchange that is now part of CME.

A CME spokeswoman declined to comment.

Write to Alexander Osipovich at [e-mail]

(END) Dow Jones Newswires

December 04, 2017 10:07 ET (15:07 GMT)

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