CBOE Bitcoin futures demand rose by 17.1% in the very first week of trading. Thus, recorded over 1000 contracts by Friday morning.
CBOE Bitcoin futures, which trades under the ticker XBT and expires in January, had a smooth first week of trading. CBOE said earlier on that the futures went on as planned on the first day of trading. Although the late Sunday trading debut conceded with near crashing of CBOE’s website as many people flocked in.
The futures are seen as instruments for reducing Bitcoin price volatility. Although volatility has not been as high this week like during the previous weeks, volatility issues triggered a two-minute halt Friday. The rise in prices also triggered two brief trading halts on last Sunday night. However, the halts were according to Cboe’s trading rules and matched other market product rules too.
Michael Mollet, director of product development for CBOE, told the Washington Post on Monday,
“The trading has been orderly. We hit a couple of our circuit-breaker halts. But those were due to price movement in futures and not due to any systems issues. We halted like our rules said we would and opened back up”.
Bitcoin price jumped over $1,000 in minutes of launching and went above $17,000 after launch.
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However, the trading volume has been low throughout the week with just about $60 million value trading each day. This was as investors chose to limit participation either willingly to monitor the first contract on an establishes exchange with a very volatile product or due to limitation put by firms offering the futures to customers. For instance, as of Thursday, major banks such as Goldman Sachs were offering limited to no support for clients to trade bitcoin futures.
Around 20 firms including Wedbush futures and Interactive Brokers did participate in the first Bitcoin futures launch. The head of Wedbush Futures, Bob Fitzsimmons, on Friday said in a phone interview,
“From our point of view, the volumes at the CFE today are not reflecting the level of interest that we’re seeing. There’s a lot of preparation by firms to trade bitcoin one way or the other. We’re seeing some digital currency hedge funds and obviously you see an element of retail in this as well, but all relatively sophisticated trading firms”.
CME Group will launch its futures this Sunday and TD Ameritrade on Monday. It is expecting that CME contract futures, due to its larger size than CBOE, will attract more attention from institutional investors.