The Chicago stock exchange is launching the first Bitcoin Futures this year
In the glass front of the skyscraper, the Chicago Mercantile Exchange (CME) is reflected. Image by Señor Codo via Flickr.com. License: Creative Commons
Chicago’s stock exchange is not only one of the largest stock exchanges in the world, but also the leading marketplace for futures and options for raw materials. With a future on bitcoins, the stock exchange now fulfills the wishes of many investors.
It often means that heavy ships only turn sluggishly and that dinosaurs are unable to adapt to new conditions. In the case of the chicago (CME) stock exchange, this obviously does not apply. The traditional hand platform is the world market leader for futures and other derivatives. With 3 billion duties of around one billion dollars (that is one million billion) annually, the CME wraps more contracts than any other platform.
This heavyweight on the market has now turned to Bitcoin. The stock exchange announced on Tuesday to launch Bitcoin futures in the fourth quarter of 2017. With this decision, according to CEO Terry Duffy, the CME reacts to “an increasing interest of customers in the growing market of cryptocurrencies.”
Futures or D -MINKONSTRAKTE are contracts with which two parties agree a trade of a certain amount of goods at a certain time and at a certain price. For example, you could say that I buy 100 bitcoins on 12.01.2018 at the price of 7.000 euros. Such futures are an essential part of risk management, especially for raw material dealers. They allow companies to rely on a secure price.
It is no longer difficult to imagine the benefits of futures on the Bitcoin markets, for example for payment service providers or miners. As the basis of the futures, the “Bitcoin Reference Rate” (BRR) should serve. This is a daily median price of various stock exchanges, which is determined at 4 p.m. London times, and should be the daily price for the futures. Today the BRR is 6.$ 555.63 – while Bitcoin Real Time Index determined by the CME in real time at just under 7.000 dollars stands.
However, the announcement does not mean that Bitcoins will soon be traded on the chicago stock exchange. The futures are “cash-only”, which means that no bitcoins are paid out after the contract has expired, but only dollars. In our example with the 100 bitcoins at the price of 7.So you don’t get 100 bitcoins, but 700.000 euros. So the futures will not increase the demand for bitcoins directly.
The futures on the chicago stock exchange are not yet approved by the stock exchange supervision. However, the announcement of CME indicates that one is quite optimistic in Chicago that this will be done. The Bitcoin Prize reacted to the announcement by continuing what it has been doing for the past few weeks: it is increasing. Meanwhile to more than 6.000 euros.
