Bitcoin futures trading begins in Chicago

Bitcoin has begun trading on a major exchange for the first time.

The digital currency launched on the CBOE futures exchange in Chicago at 23:00 GMT Sunday, allowing investors to bet on whether Bitcoin prices will rise or fall.

Its value had surged in the run-up to its futures debut, which saw it rise another 17% to above $18,000.

Bitcoin’s introduction to the CBOE has been seen by some as a step towards legitimising the currency.

The move is expected to be followed next week by a listing on the rival Chicago Mercantile Exchange.

CBOE trading saw the Bitcoin futures contract expiring in January start at $15,000 before rising to above $18,000. The contract is based on the price of Bitcoin as quoted on the Gemini exchange.

The Gemini exchange was set up by the Winklevoss twins, who were early fans of the crypto-currency and who have been called the first Bitcoin billionaires.

A CBOE insider said its start was low key, with “no champagne”. However, CBOE tweeted to warn that its website was running slowly and could be temporarily unavailable.

Anticipation of the first mainstream listings have helped the controversial currency soar past $10,000 and then over $17,000 on Thursday before retreating. The price of Bitcoin stood at about $16,600 on Monday, according to Coindesk.com.

What are futures?

Futures are contracts that allow investors to bet on the price of something at a future date.

Investors can now bet on Bitcoin rising or falling in price without actually owning them.

Futures are typically based on the price of a real commodity – such as oil.

One of the controversial aspects of Bitcoin is that some do not see it as a “thing”. Although it is called a currency, it can be argued it is an asset, or commodity, without any actual use or real assessable value.

‘Out of the shadows’

Nick Colas, of Data Trek research, said the futures listings gave Bitcoin “legitimacy – it recognises that it’s an asset you can trade”.

Chris Ralph, chief investment officer at St James’s Place told the BBC’s Today programme that he remained cautious about the currency.

“I refuse to use the word legitimate, but it’s probably moved out of the shadows into the open,” he said.

“But what I think it means is more people in the conventional investment banking market will take a look at Bitcoin.

“It has been described as the asset class of 2017 but when we went into the year no one would have called it an asset class.” […]

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