Bitcoin futures trading off to a good start Media Man Int

Bitcoin futures trading off to a good start - 11th December 2017

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The eagerly anticipated launch of futures trading of the world's largest cryptocurrency bitcoin has gotten off to a positive start, with the price nearly nine per cent ahead after briefly slipping below its opening level.

The launch of futures trading gives bitcoin the potential to win long-awaited legitimacy and a more widespread usage, but experts have worried that the risks associated with the currency's Wild West-like nature could overshadow its debut.

The price action was unlike the wild swings seen in past weeks.

The first bitcoin future trades kicked off at 11pm (local time) on CBOE Global Markets Inc's CBOE Futures Exchange, with January futures opening at $US15,460, briefly dipping to a low of $US15,420, and were last at $US16,800, with 1,006 contracts traded.

'Even if there is an institution or institutional-sized trader out there, they are going to want to make sure that the mechanics work first, just for the futures,' said Ophir Gottlieb, chief executive officer of Los Angeles-based Capital Market Laboratories.

'I think the excitement will come when the futures market is established. That can take a few days,' Gottlieb added.

The futures are cash-settled contracts based on the auction price of bitcoin in US dollars on the Gemini Exchange, which is owned and operated by virtual currency entrepreneurs and brothers Cameron and Tyler Winklevoss.

'It has been plain sailing so far for bitcoin futures trading,' said Naeem Aslam, chief market analyst at Think Markets in London. 'Looking at the contract volume traded, we believe that there is a decent demand and this is driving up the price of bitcoin,' Aslam added.

On Sunday, bitcoin was up 4.83 per cent at $US15,400 on the Luxembourg-based Bitstamp exchange.

While bitcoin's price rise mystifies many, its origins have been the subject of much speculation. It was set up in 2008 by someone or some group calling themselves Satoshi Nakamoto, and was the first digital currency to successfully use cryptography to keep transactions secure and hidden, making traditional financial regulation difficult if not impossible.

Many investors have stood on the sidelines watching its price rocket. However, it is possible to buy bitcoin without having to spend the full price of one coin. Bitcoin's smallest unit is a Satoshi, named after the elusive creator of the cryptocurrency.

So far in 2017, bitcoin is up more than 1,400 per cent. Somebody who invested $US1,000 in bitcoin at the start of 2013 and had never sold any of it would now be sitting on around $1.2 million.

Heightened excitement ahead of the launch of the futures has given an extra kick to the cryptocurrency's scorching run this year.

The launch may indeed have caused an outage of the CBOE's website. The exchange said that due to heavy traffic on the CBOE Global Markets website on Sunday, the site 'may be temporarily unavailable.

(AAP)