CME's Bitcoin Futures to Launch December 18

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The CME Group, which owns the Chicago Mercantile Exchange, will start trading bitcoin futures December 18, the company said.

Cboe Global Markets Inc. will also be dealing with the cryptocurrency, but hasn't said when it will start.

Chicago derivatives exchange operator CME Group has announced that it has self-certified the initial listing of its bitcoin futures contract to launch on December 18. "We are operationally ready and we will be announcing a launch date shortly", the spokesperson said in the new statement. After a record high on Wednesday for bitcoin price of $11,377, there was a 20 percent drop from profit takers down to $9,021; it has since fluctuated several times and is now selling at around $10,500. "This opens up the doors to exchange traded funds and institutional money". Market data from bitcoin exchanges Bitstamp, GDAX, itBit, and Kraken will be used to calculate CME's once-a-day Bitcoin Reference Rate (BBR).

Christopher Giancarlo said after "extensive discussions with the exchanges" they "agreed to significant enhancements to protect customers and maintain orderly markets". While CFTC approval isn't required, the regulatory body could have halted the CME's plans if it wasn't satisfied with the self-certification.

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"Nevertheless", Giancarlo added, "investors should be aware of the potentially high level of volatility and risk in trading these contracts".

Under the self-certification process, which is a quirk of the futures market, an exchange confirms that the product complies with the Commodity Exchange Act and CFTC regulations, including a key provision that requires the contract is not susceptible to manipulation.

The futures will be cash-settled, meaning that no actual bitcoins change hands at the expiration of the contracts.

CME has been vying with CBOE to introduce the first bitcoin-related financial product.