The world’s most popular cryptocurrency futures rose 26 per cent on the opening of the Cboe global markets exchange, triggering two temporary trading halts aimed at calming markets. The initial amount exceeded the dealer’s expectations, and the traffic on the Cboe website was too high, causing delays and temporary outages. The website’s problems have no impact on the trading system, Cboe said.
Zennon Kapron, managing director of Kapronasia, a shanghai-based consultancy, says: “there are few things that are more volatile than bitcoin, but we find bitcoin futures.
Starting futures on regulated exchanges is a watershed in bitcoin. This year, the surge in bitcoin has attracted the interest of all investors from speculators to Wall Street firms. The Cboe contract, a similar product of the Chicago mercantile exchange and Nasdaq Inc., will make it easier for mainstream investors to bet on the rise or fall of cryptocurrencies.
So far, the currency bets mostly confined to the place with little or no supervision, to prevent the institutional money managers, and make some users face the risk of hackers and market collapse.
Bitcoin futures rose to 17,540 at 11:29 a.m. London time from the opening price on January 15, closing at 2,798. The spot price climbed 6.4 percent to $16,647 from 5 p.m. on Friday afternoon, according to bloomberg.
Strategists say the roughly $900 difference reflects not only the novelty of assets but also the difficulty of clearing futures in cash.
Christian blaabjerg A/S Denmark Hellerup Ole Hansen, director of commodity strategies for the company by E-mail said: “in A normal, well-functioning markets, an ancient arbitrage can solve this problem. “If they are deliverables, you can keep it alive.”
Supporters of the regulated bitcoin derivatives say the contracts will increase market transparency and improve liquidity, but skeptics abound. JPMorgan Chase&Co. ‘s chief executive, Jamie Dimon, called bitcoin “fraudulent,” and the Chinese government has cracked down on encrypted currency exchanges this year. The futures industry association – some of the biggest Banks, brokers and traders – said this month that U.S. contracts were being pushed up without adequately considering risk.
So far, the deal has started, with no big hiccups.
Dealers said the volume of new contracts was high, although volume was small relative to more mature futures. To suspend trading is as Cboe described in the rules. After a 10% jump in the opening price and a 20% jump, the deal stopped for five minutes. In a notice on its website, the Cboe said that a five-minute pause would take effect if the increase reached 30 percent.
“It’s pretty easy,” Joe Van Hecke, a managing partner at Grace Hall Trading LLC in Chicago, said in a phone interview from charlotte, north Carolina. “I think you’ll see a strong market over time.” Cboe futures now account for a small portion of the world’s bitcoin related bets. The nominal value of the contract in eight hours is about 40 million yuan. According to the Cryptocompare.com, there are about 1.1 billion bitcoin exchanges around the world.
Garrett See, chief executive of DV Chain, says some people who want to trade futures have trouble getting into the market because not all brokers are initially supporting it. The participation may also be limited due to higher capital requirements and stricter risk limits, see the report.
“We’re at an early stage here,” said Stephen Innes, head of Asia Pacific trading at Oanda Corp., “and there’s not enough professional liquidity to come from large market-makers that offer depth and dynamics.” Become a learning curve.
It is painful for investors to be trapped on the sidelines. Bitcoin has risen more than 17 times this year alone. The surge is mainly driven by individual demand, with technical barriers blocking large fund managers such as most big fund companies.
The new derivative contracts should push bitcoin more directly into the sectors of regulators, Banks and institutional investors. On December 1, the Cboe and CME approved a self-certification process that was licensed under the U.S. commodity futures trading commission (CFTC), which promised that products would not violate the law.
Not everyone is happy with the acceleration. The futures association said this month that exchanges had failed to get enough feedback from market participants such as margin requirements, trading restrictions, stress tests and clearing. In November, ib securities Group (Interactive Brokers Group Inc.), the billionaire chairman of Thomas Peter fee (Thomas Peterffy) to the CFTC chairman j. Christopher Giancarlo (Christopher Giancarlo) to write an open letter claimed that the currency volatility means that its futures contracts should not be allowed in the removal of other derivatives platforms.
Still, ib is offering customers more restrictions on entering the futures market. The company’s customers will not be able to short, and the interactive margin requirement, or how many investors will have to be mortgaged, will be at least 50 percent. That’s tougher than Cboe and CME.
The start of the futures trading is COINS from financial edge to the mainstream of an important milestone, but if encryption currency has been a key part of the portfolio investors, may also need a period of time.
“You’ll never say never,” David Riley, director of credit strategy at BlueBay Asset Management LLP in London, told bloomberg television. “But I do think we still have a bit of a distance in terms of cryptocurrency, even a fraction of the funds that we currently manage.”