The world’s biggest exchange groups, CME Group Inc. announced on Tuesday that it is going to introduce a future contract, based on Bitcoin by the year-end.
The plan is just subjected to regulatory approval which the great step in the development of the digital currency.
The statement made by the CME Group chairman and CEO, Terry Duffy is,
“Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a Bitcoin futures contract”.
Since in November 2016, CME Group and UK- based Bitcoin futures exchange crypto facilities LTD have estimated and published the Bitcoin Reference Rate (BRR).
Therefore, it associates the trade flow of important Bitcoin spot exchange while a calculation window into the U.S. dollar price of single Bitcoin as of 4:00 p.m. London time.
Dr. Timo Schlaefer, CEO of Crypto Facilities said
“We are eager to work with CME Group on this product and see the BRR used as the settlement mechanism of this important product”.
Both CME Group and Crypto Facilities Ltd. also launched the CME CF Bitcoin Time Index (BRTI) to offer price transparency to the spot Bitcoin market.
The BRTI integrates international demand to purchase and sell Bitcoin as a joined order book and mirrors the air, immediate U.S dollar price of Bitcoin in the spot price.
Hence, it is published to make suitable for marking portfolios, processing intra-day transaction of Bitcoins and risk management.
Recent years the capitalization of cryptocurrency has raised to $172 billion, with Bitcoin representing more than 54% of $94 billion.
Given the volatility of Bitcoin price, the futures contract will provide an opportunity for traders to forecast of progressive appreciation. In July, founder of Standpoint Research, Ronnie Moas, fixes a $50,000 price target on Bitcoin by 2027.
The massive increase in the Bitcoin has created a statement whether it is a legitimate financial or not. However, some of the Cryptocurrency exchanges has been said as a fraud.
Other like CME puts on the front end as one of the business opportunity. CBOE, a rival exchange group has submitted with U.S. regulators to introduce a Bitcoin future contract. Thus, a Bitcoin exchange-traded fund on its locations.
Greg Adamsick, director of global futures and options at RCM alternatives in Chicago, said
“There are a lot of people who want to participate in bitcoins. Thus, the blockchain technology so it should be well-receive”.
Further, he added
“This should make it more comfortable for people to hold (bitcoin)”.
Image Source: CME Group