Investors have turned to a small set of existing products, including the Bitcoin Investment Trust (GBTC.PK), an "over-the-counter" offering in the United States that sometimes sells for more double what the bitcoin it holds is worth.
Bitcoin is, seemingly, the cryptocurrency that can do no wrong.
The difference between a futures contract and a forward contract is that instead of being non-standardised, a futures is standardised. In particular, while WTI oil futures for December delivery increased in price by as little as 0,11% up to $56,80/b, Brent oil futures for January delivery lost 0.09% and moved down to $63,46/b.
"Given the unprecedented interest in Bitcoin, it's vital we provide clients the trading tools to help them express their views and hedge their exposure".
Also, in my opinion, the introduction of Bitcoin futures may boost the confidence of some of the investors that have been reluctant in embracing the bitcoin revolution because they are uncomfortable in trading in the less familiar and unregulated bitcoin exchanges characterized by frequent outages. On the 18th December, it too will start trading bitcoin on its futures contract.
The most-traded contract on the Chicago-based CBOE Global Markets exchange XBTc1 opened at $15,460 in New York on Sunday evening, before leaping to a high of $18,700 - a gain of 21 percent. By late Sunday it was trading above £16000.
Wall Street is also concerned.
Reminding us about the challenges associated with high-frequency trading, the Founder of Nanex kindly reminds us of what algos are capable of in thin liquidity conditions.
Bitcoin futures began trading yesterday at a price of $15,000 USD, reportedly matching the price of one Bitcoin on the Gemini Exchange.
Bob Fitzsimmons, a futures manager at Wedbush Securities, described the opening as "quiet and steady", as Cboe data showed around a thousand trades were made in the first two hours. After trading stopped for two minutes, it resumed until 5:05 GMT when it was halted again as the second trigger barrier was reached at 20 percent. Immediate escalation of trade tensions between the EU and China is unlikely, but this is a core issue for China and the Chinese commerce ministry said it would firmly defend against any potential "abuse" of WTO rules. Tyler and Cameron Winklevoss, twin brothers who own large amounts of bitcoin, tried to create an exchange-traded fund based on bitcoin, but federal regulators denied their application. For stocks, it's a company and the goods or services they produce. "Everyone wants to be first doing this in the ETF space, but no one has real experience in the bitcoin market".
Bitcoin is stealing gold's thunder as the holiday season approaches. Unlike traditional commodities, there's not a physical asset behind it. And unlike currencies, there isn't a central bank ready to back bitcoin up. Some say they serve merely to facilitate money laundering and illicit, anonymous payments.