The Chairman of the United States largest derivatives exchanges says Bitcoin derivatives trading could start as soon as the second week of December. Terry Duffy, who also doubles up as the CEO of CME Group was speaking in an interview with the CNBC. He said
"I think sometime in the second week of December you'll see our contract out for listing."
Futures contracts are part of a recent tidal shift to professionalize bitcoin. CME made the headlines after disclosing it was in the process of approval for a new cash-settled Bitcoin derivative product planned for the fourth quarter of 2017.
Notably, Terry Duffy addressed the issue of coping with excessive volatility in bitcoin markets. He explained the exchange would consider halting trading in cases of wild price fluctuations in addition to calling in rules already in place for handling shocks for other products.
"Listen, when someone says to me, 'the price is going to zero, what are you going to do?' I'm not going to let it go to zero," he quipped,
"I'm going to implement something. If the market drops precipitously, we'll stop trading, and if we think a product is going away, we have the longs, we have the shorts, we'll match them up at a price, and that's the way our rules read today."
The news of CME's involvement portends well for further buying interest from institutional investors. Mike Novogratz, an Ex-Wall Street hedge fund manager, says most of them are put off by bitcoin's opaque and speculative pure form. He expects the introduction of regulated Bitcoin backed financial products to attract big money into Bitcoin over the next 6 - 8 months and push the price as high as $10,000.
Until now, only Ledger X LLC had permission from the CFTC Commodity and Futures Trading Commission to run a Swap Execution facility for bitcoin derivatives. The digital currency clearinghouse process its first batch of 176 Bitcoin swaps and options contracts worth $1 million traded on October 20th.