Bitcoin futures soar on first day of trading in Chicago

By Ed Adamczyk Contact the Author   |  Dec. 11, 2017 at 11:40 AM
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Dec. 11 (UPI) -- Trading in bitcoin and bitcoin futures began Monday with a quick rise in price on their first day of trading on the Chicago Board Options Exchange.

Trading in the cryptocurrency's futures began Sunday evening on the CBOE market, the first legitimate exchange to offer opportunities to speculate on the value of a bitcoin.

The bitcoin contract opened at $15,000 and jumped 11 percent to $16,600 within the first six minutes of trading, and eventually reached $18,040.

Trading was stopped on the exchange for several minutes Sunday night because of the rapid price increase. The exchange operator can impose a halt to trading after a 10 percent price swing.

A futures contract assigns a pre-determined price to an asset to enable speculation and reduce market volatility. Bitcoins are not regulated by any bank or foreign government, and have been used as payment in money laundering and drug transfers. Other than a digital footprint, there is no paper money or coinage to indicate possession of bitcoins.

The CBOE's initial bitcoin contract expires next month.

Mt. Gox, a company specializing in bitcoin exchange, collapsed in 2014 after a robbery of over $470 million worth of the currency.

The value of a bitcoin itself rose as quickly, trading at $14,577 in the minute before futures trading opened and rose to $15,571 by 10 a.m. Monday. Its total market capitalization -- multiplying the current price by the number of bitcoins in circulation -- is now about $277 billion.

Monday's launch of a bitcoin futures market was a milestone for the digital currency, which has detractors who say it can be manipulated by computer hacks and technical problems.

While only one bitcoin exchange is currently open, in Chicago, four more will open soon. All cite the maturity of the industry and their embrace of regulation and laws regarding money laundering.

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