CME Group Inc (CME.O), the world’s largest derivatives exchange operator, has confirmed that it will launch a futures contract for Bitcoin effective December 10, marking a major step in the path to legitimate the cryptocurrency and helping to propel it to fresh record highs.
Bitcoin rose to a record high above $8,240 on Monday, according to data from CoinDesk, after the announcement by the world’s largest futures exchange.
“Effective Sunday 10 December 2017 for trade date Monday 11 December 2017, and pending all relevant regulatory review periods, please be advised that CME will launch Bitcoin Futures,” explains CME Group’s most recent update.
The new contract will be settled in cash, based on the CME CF Bitcoin Reference Rate (BRR), a once-a-day reference rate of the US dollar price of Bitcoin. Bitcoin futures will be listed on the CME as monthly contracts for the nearest 2 months in the March quarterly cycle (Mar, Jun, Sep, Dec) plus the nearest 2 serial months not in the March quarterly cycle.
CME Group announced in late October that it intends to roll out a Bitcoin futures contract in Q4 2017, pending necessary regulatory review periods.
CME’s action not only sparked a big rally in the cryptocurrency, with Bitcoin climbing from $6,000 the day before the announcement to more than $7,900 last week, but it has also generated a lot of buzz in the institutional investment community.
The independent, transparent Bitcoin benchmark that the world’s largest exchange owner may offer will certainly further professionalize the digital asset class and finally bring it some regulatory cover. It also makes cryptocurrency trading a lot more palatable for the institutional players, as the new instrument will allow them to hedge for Bitcoin volatility and avoid some of the hassles of investing in Bitcoin directly.