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Bitcoin Futures Are About To Be a Thing and It's Sending Prices Soaring

Bullish investors have pushed Bitcoin above $10,000, after the CFTC approved Bitcoin futures for the CME, CBOE, and Cantor Fitzgerald. Bloomberg via Getty Images

Bitcoin prices soared as high as $10,700 Friday after the main U.S. currency trading watchdog handed the Chicago Mercantile Exchange and Chicago Board Options Exchange a tentative go-ahead to offer bitcoin futures.

Following the news, the CME said it would begin offering bitcoin futures on Dec. 18. The CFTC also allowed for Bitcoin binary options to Cantor Exchange, a subsidiary of Cantor Fitzgerald.

Given assurance that the U.S. Commodity Futures Trading Commission would not stop the Bitcoin futures offerings, bullish investors sent the cryptocurrency’s price up by 7% on Friday. Bitcoin supporters are hoping that with major derivatives exchanges such as the CME and CBOE in the mix, funds from institutional investors will flow into the cryptocurrency sphere—a phenomenon that could add more stability to the volatile asset.

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But the CFTC still warned investors to be wary of Bitcoin due to its temperamental nature. Earlier this year, the U.S. equities trading watchdog, the Securities and Exchange Commission, rejected a Bitcoin ETF proposal in part because of the underlying asset’s volatility.

“Market participants should take note that the relatively nascent underlying cash markets and exchanges for Bitcoin remain largely unregulated markets over which the CFTC has limited statutory authority,” CFTC Chairman J. Christopher Giancarlo warned in a statement. “Investors should be aware of the potentially high level of volatility and risk in trading these contracts.”

The exchanges gained the nod from the CFTC via a process known as self-certification, by which the exchanges analyze and prove to the commission that their products meet regulatory requirements. The commission added that it would continue monitoring Bitcoin futures closely.

Despite the rise, Bitcoin prices Friday are still below their all-time high from a few days earlier, when they breached $11,300.

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