Bitcoin futures rose by 20% during the debut of the postponed trade of the world’s most popular crypto-currency. The trading was marked by two temporary short stops designed to cool volatility. The traders said initial volumes exceeded expectations, while Cboe’s website traffic was so intense that it caused delays and interruptions. The Exchange said all its trading systems were in normal condition.
The Bitcoin supporters hope that this will encourage more widespread use of the currency and solve problems associated with its legitimacy, even though critics warn of the risk that this asset might turn out to be a bubble, as well as a collapse in prices.
The launch of Bitcoin futures traded on a regulated exchange is a cornerstone of the test of the infrastructure that will make it easier for legions of professional traders and the major investors to bet on the rise or fall of the crypto-currency, which potentially will help drive the price. So far, trade of Bitcoin is mainly driven by individual investors who are prone to risk buying on largely unregulated markets.
The commencement of the futures trading on the Bitcoin on Sunday night temporarily stopped the access to the site of Chicago Markets Global Markets due to the heavy traffic.
Bitcoin futures with delivery in one month opened trading at 15,460 USD, then fell for a short time, followed by a rise to 18,700 USD. At about 6:30 GMT on Monday, the Bitcoin futures reported a 16% rise in price to 17,900 USD with 2,112 trades.
The Luxembourg-based exchange Bitstamp raised the price of futures by 7% to 15,720 USD. At the same time, since the beginning of the year, the appreciation of the most popular crypto-currency reached 1,400%, and even in the last month the price literally galloped.
The experts worried that direct sale may overshadow futures trading, but so far expectations are not being realized, as only on Friday, the crypto-currency declined by 20% in just 10 hours.
According to investors, the launch of futures trading will hardly reduce the volatility of the crypto-currency market.
While the cost of a Bitcoin literally marks cosmic jumps in a very short time, it continues to be the subject of many speculations and opposing views. According to one of the theories, the currency was created by one person or a group of people under the pseudonym of Satoshi Nakamoto. The Bitcoin is the first digital currency to successfully use cryptography to keep transactions so invisible and protected that makes traditional financial regulation difficult or impossible.
“It looks just like forming a bubble”, said the Governor of the New Zealand Central Bank, Grant Spencer. “Anyway, someone who bought Bitcoins at 1,000 USD in 2013, has a tremendous return on his investment”, added he.
More skeptical market participants warn that futures trading poses risks to both investors and clearing companies involved in trade.
Several online brokers, including Charles Schwab and TD Ameritrade, will not allow the trading of emerging futures on the first day.
Some of the big American banks, including JPMorgan Chase and Citigroup, will also not dive immediately into the business.