On the very first day of launch, CME Bitcoin Futures contract open above $20000.
Finally, as per the scheduled time, CME’s Bitcoin futures Contracts go live today and as far as the initial reports are concerned, the contracts have made a strong entry in the market. The contracts opened above $20,000 precisely at $20,650 but later within the next half hour, it witnessed a correction of 6% slipping to around $19000 levels.
As per CME’s data, around 200 Bitcoin futures contracts were bought in the initial hour of trading and the number stands to 666 volumes at the press time. The existing data also show that one Feb 2018 contract, two March 2018 contracts have already been sold and six contracts are scheduled to expire in June. Prices of all these three contracts are above $20000 at the press time.
While commenting on the initial trends, Spencer Bogart, a partner at Blockchain Capital LLC said “We saw a nice open on light volume, but pretty uneventful so far. I do think we could certainly pick up in volume as Asia begins to open. This is a brand-new asset class and I think perhaps a lot of investors want to sit back and see how this plays out before dipping their toes in this market.”
In the past four days just before launch, a huge optimism was seen within the Bitcoin investors as the price of Bitcoin surged to above $20,000 to make a new all-time high. Bobby Cho, head trader at major bitcoin trading company Cumberland, said that the initial trends show that CME contracts are trading quite close to the actual Bitcoin price when compared to CBOE’s contracts.
He further stated “There are more people who are involved in the CME launch than there were at Cboe’s. The spot market still dictates where futures are trading, just because of the sheer volume.” One of the key differences between the CBOE’s and CME’s contract is that the size of CBOE contract consists of one Bitcoin, but that of CME’s contract it consists of five Bitcoins. Analysts believe that CME’s contracts can drive more volumes, especially from institutional investors.
A similar view was expressed yesterday by Matt Osborne, chief investment officer of Altegris, who said “The CME [futures] contract is based on a broader array of exchanges. So there is a possibility that the CME contract may generate more interest and more volume. Volumes are going to slowly increase as professional traders get comfortable with the price action and more importantly get comfortable with the volatility.”
The past week has been a smooth sailing for the CBOE futures contract although lukewarm volumes have been seen. Nearly 20 firms have participated in the CBOE contract including some famous names like Wedbush Futures and Interactive Brokers.
With Bitcoin futures contracts already in action now, many are looking forward to the launch of exchange-traded-funds (ETFs) are the next Bitcoin investment instrument as the talks for the same are already going on. However, the general sentiment in the market still issues a caution at the current Bitcoin prices and many analysts say that investors should be careful at this point in time if at all they are considering for fresh investments.
Some other exchange boards like Nasdaq and Tokyo Financial Exchange have also expressed interest to start their own futures contract next year in 2018.