Bitcoin Spikes as CME Exchange Announces Futures

Jeannie Matthews
October 31, 2017

Just days after Gain Capital Holdings Inc (NYSE: GCAP) announced it will be launching bitcoin trading on its platform, CME Group Inc (NASDAQ: CME) now says it will be launching bitcon futures starting in the fourth quarter.

The move is a vote of confidence in the controversial virtual currency, which has not been listed on a major exchange previously.

"Given increasing client interest in the evolving cryptocurrency markets, we have made a decision to introduce a bitcoin futures contract", Terry Duffy, CME Group (NASDAQ:) chairman and CEO, said in a statement. Some types of futures contracts rarely result in delivery of the underlying asset.

According to a press release from the company, the new contract will be cash-settled, based on the CME CF Bitcoin Reference Rate (BRR) which serves as a once-a-day reference rate of the USA dollar price of bitcoin.

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The cryptocurrency jumped almost 5 percent to as high as $6,420 after the announcement.

The price of bitcoin jumped to as high as $6338.60 according to trade website Coindesk's price index, which aggregates the prices quoted across several exchanges.

It followed an announcement by CME, the world's largest futures market operator, saying that it plans to sell the derivative based on the value of Bitcoin in the future.

Last month the chairman and chief executive of JPMorgan Chase, Jamie Dimon, described Bitcoin as a "fraud" and told his company's investors it was "worse than tulip bulbs".

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