Despite the speculation that Bitcoin futures would make the famous volatility asset easier to run, the launch of CBOE futures trading tonight triggered a huge rally for the currency. The futures trade started on December 10 at 5 pm Central Time at $ 15,000, corresponding to the price of a Bitcoin on the Gemini Exchange.
At the time of publication, about five hours later, the price of Bitcoin has climbed to $ 16,800 on Gemini. Futures contracts maturing in January 2018 are trading at $ 18,500, up $ 3,500. This rapid rise in the futures price has already triggered two “breakers” and threatens to trigger a third. CBOE has put in place so-called breakers to give traders a chance to pause and reconsider in case of large price movements. Any gain or loss of more than 10% triggers a two minute halt in trading, while a move of 20% or more will result in a five minute break.
As we announced earlier tonight, CBOE’s launch of its Bitcoin term product (trading under the symbol “XBT”) has caused a surge in demand for the Exchange’s website to collapse almost immediately. In the past five hours, approximately 2,000 contracts have been traded. Each contract represents a Bitcoin, which implies a volume of transactions greater than $ 30 million in just a few hours. This is particularly noteworthy since Wall Street traders usually work only from Monday to Friday. Chances are good that tomorrow will be a very big day, indeed.