TRADING VENUES

CME Group to launch Bitcoin Futures

Bitcoin Futures will be based on the CME CF Bitcoin Reference Rate which calculates trade flow of bitcoin.

By Hayley McDowell hayley.mcdowell@strategic-i.com October 31, 2017 2:45 PM GMT

CME Group is to launch Bitcoin Futures later this year based on its once-a-day reference rate of the US dollar price of the crypto currency.

Contracts will be cash-settled, listed on and subject to the rules of exchange when it is officially launched in the fourth quarter this year. CME said the launch is “pending all relevant regulatory review periods”.

The product will work alongside the CME CF Bitcoin Reference Rate (BRR), which calculates and publishes the trade flow of major spot exchanges and has been operation since November last year.

The BRR is produced in partnership with crypto currency trading platform provider, Crypto Facilities. Its CEO, Timo Schlaefer, commented the reference rate has proven to be a reliable reflection of bitcoin-dollar trading.

CME and Crypto Facilities also confirmed plans to publish the CME CF Bitcoin Real Time Index, offering price transparency to the spot bitcoin market.

The move follows rival exchange operator Cboe Global Markets’ plan to launch similar cash-settled bitcoin futures contracts in partnership with digital asset exchange and custodian Gemini, by the first quarter of next year, pending regulatory review.  

CME Group CEO, Terry Duffy, claimed as the world’s largest regulated FX marketplace, the exchange is “the natural home for this new vehicle that will provide investors with transparency, price discovery and risk transfer capabilities”.

Market capitalisation of crypto currency currently stands at $172 billion after seeing considerable growth in recent years.

Bitcoin represents 54% of that total market capitalisation and the bitcoin spot market has grown to trade around $1.5 billion in notional value each day.