Bitcoin Futures Launches Today: What to Expect

Crypto Players Address Bitcoin Futures Critical Issues

The first trading of Bitcoin futures will begin today, putting another price factor into Bitcoin. The futures at CBOE launch just days after Bitcoin peaked to $20,000 on the Korean markets, and South Korean authorities decided to ban futures trading for now.

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Crypto Players Address Bitcoin Futures Critical Issues

Just as Bitcoin rose ahead of hard fork news, the market behavior has been similar, setting records in the days leading up to an important event.

"The pretty sharp rise we have seen in bitcoin in just the last couple of weeks has probably been driven by optimism ahead of the futures launch," said for Reuters Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

Because of Bitcoin's high volatility, the futures settlement will require higher margins of 44% to offset the potential for sharp price moves. Bitcoin futures would be cash-settled and not require the owning of wallets and a physical delivery of coins.

What traders have now is a "spot market" provided by exchanges with varying legal status and often plagued by cyber security issues. The presence of a Bitcoin product on a well-run market, therefore, created another huge wave of optimism as the once hobbyist coin is now seen as a mainstream asset class.

But futures trading may not begin immediately, and would depend on the rules of brokerage companies. Interactive Brokers Group will require 50% margins and will not allow shorting. Several other brokerages will take a wait-and-see position and not offer the XBT product immediately. Goldman Sachswill offer limited clearing to certain clients, and other large investment banks like Citigroup and J.P. Morgan Chase&Co will not offer settlement for now.

It is still unknown if the presence offutures tradingwould "tame" the price of Bitcoin, or cause trouble for the settlement houses.