Bitcoin futures started trading yesterday on the Cboe futures exchange, putting a spotlight on the digital currency.
The launch of Bitcoin futures is a huge recognition for the cryptocurrency, but it also puts a lot of pressure on the underlying markets for Bitcoin.
Yesterday morning, after opening at $15,000, the January-expiration contract on Bitcoin peaked at $18,220 within mere hours of trading, with an 11% surge to $16,660 in the first six minutes alone.
The excessive volatility forced Cboe to stop trading for a couple of minutes towards the end of the trading day, according to a spokeswoman. In just the first three hours, approximately 1,000 contracts were transacted.
The Bitcoin market is still unregulated, and its history is littered with controversy and trouble in other forms. The largest Bitcoin exchange, Mt. Gox, went bankrupt in 2014 as hackers stole more than $470 million worth of Bitcoin.
The launch of Bitcoin future now brings Wall Street right to the crypto’s doorstep, and the with billions of dollars involved, researchers and analysts will pouring all their money, time and talent into keeping a close eye on Bitcoin.
Every move, every mistake or even a possibility of a future mistake will now get brutally exposed.
The launch of Bitcoin futures could be the first step in getting the cryptocurrency into the mainstream financial world, but it could also swing things the opposite way unless the underlying market continues to evolve to handle its current prime-time status.
Manipulation by unscrupulous traders, hacking or even a slight technical glitch will now hit the futures price hard. And if futures take a hit, then Bitcoin will have to pay the price. Literally.
