CME Group, the bitcoin trading volume’s largest derivatives exchange operator, has begun trading bitcoin futures. 20,650 in a session that extends into Monday. 19,500 reference price set by the exchange for the January contract. 19,900 for June, according to CME.
The launch of bitcoin futures is viewed as a major step in the digital currency’s path toward legitimacy that should ease the entry of big institutional investors. We saw a nice open on light volume, but pretty uneventful so far. I do think we could certainly pick up in volume as Asia begins to open. Spencer Bogart, partner at Blockchain Capital LLC, said shortly after trading began on Sunday. Volume on CME was recently at 287 contracts. On its debut last Sunday, the Cboe traded nearly 4,000 contracts during the full session.
Bitcoin was set up in 2008 by an individual or group calling itself Satoshi Nakamoto, and was the first digital currency to successfully use cryptography to keep transactions secure and hidden, making traditional financial regulation difficult if not impossible. Some investors believe the CME bitcoin futures could attract more institutional demand because the final settlement price is culled from multiple exchanges. The Cboe futures contract is based on a closing auction price of bitcoin from the Gemini exchange, which is owned and operated by virtual currency entrepreneurs Cameron and Tyler Winklevoss. The general sentiment in the market remains one of caution and that has been reflected in margin requirements for the contracts. In the futures market, margin refers to the initial deposit made into an account in order to enter into a contract. One futures trader said the average margin for brokers or intermediaries on bitcoin contracts was roughly twice the exchange margins.
Sign Up for Our Newsletters Sign up now to receive FORTUNE’s best content, special offers, and much more. Fortune may receive compensation for some links to products and services on this website. Offers may be subject to change without notice. Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. P Index data is the property of Chicago Mercantile Exchange Inc.