US Regulator, Commodity Futures Trading Commission (CFTC) Shows A Green Signal to Bitcoin Futures Trading
2017 seems to be the era of bull’s run in crypto territory. The massive price hike of Bitcoin was followed by a pro-crypto stand taken up by various regulatory bodies worldwide, some of which gave a green signal to its trading whereas other tried bringing in regulation for steering clear of money laundering and fraud association.
The price of this hotcake received an enormous push when two of the biggest US exchanges, CME and CBOE announced their plans of launching Bitcoin futures by year end. CME gave a date for second week of December for Bitcoin Futures whereas CBOE announced an early 2018 launch. However both their final proceeding was subject to regulations passed by Commodity Futures Trading Commission (CFTC). The announcement made by the US regulator on Friday allowing the same has taken Bitcoin a step closer towards mainstream financial adoption.
After CME and CBOE, NASDAQ the second most valuable stock market exchange in terms of market cap also announced to launch Bitcoin Futures by first half of 2018.
This has added to the volatility of the crypto market by sending its price further up the ladder. Wednesday was market by the $11400 pricing of Bitcoin which diminished by 20% in the next 24 hours. The announcement of CFTC is regarded by market experts as a watershed moment in the history of Bitcoins. Once these cryptocurrencies start being traded at the exchanges, investors would be able to enter into Bitcoin future contracts. Under future contracts, investors can decide upon buying a certain quantum of such digital tokens after the passage of a certain span of time and at a specified price. CME Group has revealed the trading to be available from 18th December on its CME Globex electronic trading platform.
Both CBOE and CME have decided to enforce stringent procedures for increasing the strength of the risk management frontiers associated with futures trading in Bitcoin. These two US exchanges have also agreed to collaborate on data-sharing agreements especially in regards to the settlement process. This will help CFTC in conducting its very own surveillance work on the financial contracts.
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Tarunima Ghosh Laha
Tarunima Ghosh Laha is a Finance Post Grad from St. Xaviers who believes Finance is more than just Balance Sheets and Ledger creation. This filmy bookworm who believes she was a sloth in past life also nourishes a penchant of owning a private zoo someday. Equipped with a laptop and online Lexicon she is all set to give finance a glamorous makeover in the form of exciting writeups with bang on info and flashy new words.