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If you&rsquo,re tired of people calling your Bitcoin fixation sketchy, you now have a very good counterargument. The Chicago Houtvezelplaat Options Exchange became the very first traditional exchange to suggest bitcoin futures on Sunday, permitting investors to bet on switches to the cryptocurrency&rsquo,s price, which is a landmark for its legitimacy spil a currency. CME Group, another options and futures exchange, also plans to launch Bitcoin futures next week. According to the Wall Street Journal, CBOE&rsquo,s futures contracts opened at $15,000 and rose 11 procent within the very first six minutes of trading to $16,660. Investors exchanged around 1,000 futures ter the next three hours, and prices slok up 26 procent te total by the time this very first trading session had ended. The price of Bitcoin itself skyrocketed by more than $1,000 on Sunday ter the very first Ten minutes of futures trading. On Monday morning it had reached a high of around $16,700&mdash,another peak ter what has bot a dramatic year for the currency.
Yet the debut wasn&rsquo,t fairly a slick takeoff. An influx of traffic caused the CBOE&rsquo,s webstek to crash on Sunday, and it had to suspend trading for two minutes due to a Ten procent price leap, and straks for five minutes due to a 20 procent leap. The CBOE can impose such halts when the price swings by Ten procent or more.
Thesis petite bumps aside, what investors seem particularly worried about is what could toebijten to exchanges that rely on a fresh and largely unregulated currency. The threat of technical glitches and malicious actors exploiting the underlying cryptocurrency market may be keeping some of the largest futures brokers, such spil JPMorgan and Citigroup, from participating. Reports suggest that a 2014 val ter which Mt. Gox, the largest bitcoin exchange at the time, collapsed due to a $470 million theft, is still a fresh concern. There are also fears that &ldquo,bitcoin whales,&rdquo, investors who own enough of the cryptocurrency to sway its value, could influence the futures market.
The bitcoin exchanges partnering with the CBOE and CME, for their part, optie to be enforcing anti-money-laundering laws and regulations that would prevent such malicious acts from reverberating through to the corresponding futures market.
For better or worse, the introduction of futures also opens fresh possibilities for brief selling, or betting against, bitcoin. Prior to Sunday, high transaction fees for the cryptocurrency itself made it lighter to buy and hold coins than to brief them. Because the transaction fees are lower with futures, thus permitting more liquidity, there are greater incentives to attempt to make a profit on bitcoin price plunges. While some worry Wall Street pros now have an opening to commence aggressively brief selling and driving Bitcoin prices down, others believe that this fresh opzicht of Bitcoin trading will prevent the cryptocurrency from becoming overvalued&mdash,surely that could never toebijten!&mdash,thus coaxing hedge funds to take it more earnestly ter the long term. Plus, there are few signs ter thesis early stages of futures trading that shorting has adversely impacted the price, however the bears could still be waiting for the right ogenblik to display their teeth.
Aaron Mak writes about technology for Slate. Go after him on Twitter.