Investors are clamoring for any opportunity to trade bitcoin, and now major market exchanges are battling to be the first to provide that opportunity. This week, CBOE Global Markets announced that it will launch bitcoin futures trading starting on Sunday, eight days ahead of competitor CME Group, Inc. (Nasdaq: CME). Nasdaq ( NDAQ) has also said it will be launching bitcoin futures trading in early 2018.
CBOE will be the first exchange to offer direct access to bet on or against bitcoin, which has been one of the most volatile and polarizing investments of 2018. The price of bitcoin has doubled in the past month and is up 1,400 percent for the year.
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The U.S. Securities and Exchange Commission has rejected multiple proposals for bitcoin exchange-traded funds to be listed on major U.S. exchanges due to lack of cryptocurrency regulation. Up to this point, the Bitcoin Investment Trust, which is traded on the lightly-regulated over-the-counter market, is one of the few available options for traders.
However, bitcoin futures trading will provide easy access for investors to either get in on the bitcoin boom or bet on a bursting bitcoin bubble.
The Financial Times reported this week that the Futures Industry Association, a lobby group that includes big banks such as Goldman Sachs Group ( GS) and Morgan Stanley ( MS), sent a letter to the Commodity Futures Trading Commission warning that it could be difficult for the financial system to handle the wild volatility of the bitcoin futures market.
Nick Spanos, founder of Bitcoin Center NYC, says futures trading may actually help reduce bitcoin’s volatility. “My prediction is that bitcoin futures trading is going to reduce the swings of volatility and make things more normal and steady for regular investors and traders,” Spanos says.
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Wall Street remains divided on the bitcoin craze. On Thursday, Standpoint Research analyst Ronnie Moas raised his price target for Bitcoin to $28,000. Bitcoin bulls like Moas say the cryptocurrency is a legitimate store of value, similar to gold.
Bitcoin bears see the cryptocurrency as a textbook financial bubble. CNBC analyst Jim Cramer says buying bitcoin is like betting on the Super Bowl. “It’s just pure gambling at this point,” Cramer says. “I mean if you want to gamble, go to Vegas.”
CBOE’s bitcoin futures contracts will be cash-settled against the Gemini Trust auction price for bitcoin. The contracts will trade under the ticker XBT.
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Bitcoin Catches Fire Ahead of Weekend Futures Launch originally appeared on usnews.com
