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USA retail broker to let clients trade bitcoin futures

17 December 2017

The volume of trading since bitcoin's launch on CBOE has been relatively low, especially compared with more established currencies futures. In this regard, the trade association for the futures markets, the Futures Industry Association warned the USA regulator that not enough risk evaluation has been done on Bitcoin and the risks it poses to financial stability.

Japan, the center of the cryptocurrency industry in Asia, is also planning to attract bitcoin futures trading in the near future. It offers its services to traders and independent registered investment advisors, and retail investors.

The start of futures trading this week on the Cboe has been widely hailed as a turning point for bitcoin, giving it slightly more respectability but, more importantly, creating some regulation over a part of the market (futures) and improving transparency. Trading in bitcoin futures commenced at the CBOE on December 10 and will commence on CME on December 18, with Cantor's options trading to follow.

It's not all woes for the futures contract market- it has been successful, in a modest way.

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The virtual currency has added another fifth to its value this week following the start of bitcoin futures trading on the Chicago-based Cboe last weekend.

One key requirement of futures contracts is that they must be traded on standardised exchanges such as the CBOE or CME. On average, roughly $60 million in notional value has traded each day.

Bitcoin is more valuable than the circulating currencies of both Hong Kong and India, and it is just a few billion dollars behind that of Saudi Arabia.

Today at the Bitfinex exchange, bitcoin prices have broken previous all-time highs as it trades above $18,000.

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"Our evidence finds that the price of bitcoin has been artificially inflated by speculative investment, putting it in a bubble". "That will allow the entry of hedge funds and larger institutional players, who may have a very different notion of bitcoin's future".

The warning underscores that even as Washington makes it easier for bitcoin to move out of the shadows, worries remain that the mom-and-pop investors who've helped fuel its rise have little idea what they're jumping into.

Perhaps more worryingly, the levels of futures trading has not been as high as the initial flurry of excitement may suggest.

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USA retail broker to let clients trade bitcoin futures