CME Group’s planned Bitcoin (BTC) futures contract could be listed as early as mid-December, according to the company’s chairman and chief executive officer Terry Duffy.
"When can you be able to short this product, I think sometime in the second week in December you'll see our contract out for listing," Duffy said during an appearance on CNBC’s “Power Lunch” programme on Monday.
In a statement, published on October 31, CME announced its plans to launch BTC futures by the end of the year, pending regulatory review. The announcement prompted a wave of optimism among Bitcoin investors, which contributed to the cryptocurrency’s record-breaking rally in early November. Some industry watchers said that the move had legitimised Bitcoin in the world of mainstream finance.
BTC futures will enabling traders to bet on potential declines in the Bitcoin price (BTC/USD) via a practice known as short selling, or shorting. At the moment, there isn’t a reliable mechanism allowing people to short Bitcoin.
"I'm not trying to rein in the volatility of bitcoin," Duffy said yesterday. "But what I want to do is give it a place for other people to lay out that risk. Today you cannot short bitcoin. So there's only one way it can go. You either buy it or sell it to somebody else. So you create a two-sided market, I think it's always much more efficient."
CME’s website details how BTC futures trading will be handled on the platform. For example, the company will employ special price fluctuation limits of 7% and 13% above and below the Bitcoin futures' prior settlement price, and a price limit of 20% above or below that level.
„Trading will not be permitted outside the 20% above and below prior settlement price,” the company says on its website.
In today’s trading, the Bitcoin price stood at $6,586.36, as of 09:50 GMT. The cryptocurrency has gained 3.3% in the past 24 hours, according to data from cryptocurrency tracker Coinmarketcap.
For further information on how to buy and trade Bitcoin, see our comprehensive Bitcoin guide.