No one is sure whether bitcoin futures will pop or drop at the start, but it should be wild

Bitcoin futures are expected to bring some stability to the wild cryptocurrency market, but not at the start.

The Cboe is the first of three U.S. exchanges planning a futures product, and its contract, based on a single coin unit, launches at 6 p.m. ET Sunday.

Some trading firms and brokers plan to stand back and watch the initial action, but others are wading in cautiously into a product that allows the first regulated two-way trade where bitcoin can actually be shorted.

The launch comes on the heels of a dramatic week of trading, where bitcoin rocketed from about $11,000 on Monday morning to above $19,000 Thursday and back down to where it was near $15,000 Friday. The move by the U.S. exchanges could give legitimacy to the cryptocraze, driven by investors worldwide, but not embraced by the biggest financial institutions.

“I think the first hour will be really fun to watch because … we’re at the point where no one knows. I think this is going to be one way or the other, you’re going to get a tremendous amount of interest in that first hour or you’ll have people sitting around saying, ‘What are we going to do?'” said JJ Kinahan, chief strategist at TD Ameritrade.

The Cboe leapfrogged the CME which starts trading its contract Dec. 18 and the Nasdaq, which hopes to launch in the second quarter of next year.

The U.S. exchanges have come under criticism from the Futures Industry Association, a trade group for the world’s biggest banks and financial institutions, for rushing to join the cryptocurrency frenzy that many say has all the makings of a giant bubble. The FIA complained that the exchanges did not engage in enough dialogue with the clearing institutions for a product that could be highly volatile and risky.

Another issue for the futures market is that there is no big cash market sanctioned by the financial establishment, so some of those institutions, like JPMorgan and Citigroup, are not planning to initially provide clearing services, according to reports.

The exchanges are actively trying to head off some wild speculation by setting higher than normal margin requirements. The Cboe says it will require a minimum of 40 percent – up from its original 30 percent and about 10 times the amount of margin required on a futures contract on something like the S&P 500.

“My gut says there’s going to be some wild volatility and swings in the first couple of days. You’re going to see limit up, limit down a lot, and then it’ll probably settle down, but I really don’t know,” said Larry Tabb, founder and head of research at Tabb Group.

Tabb said a problem is there’s no real intrinsic value of bitcoin, which trades on a number of different cryptocurrency exchanges at different prices…

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