The bitcoin price posted a single-day decline following the much-anticipated launch of bitcoin futures contracts on U.S. derivatives exchange CME.
CME Launches Bitcoin Futures
As CCN reported, the Chicago-based exchange listed bitcoin futures for trading on Sunday evening. Bitcoin futures had already been trading on fellow Chicago exchange CBOE for one week, but CME is a much larger exchange, and analysts expect it to attract much more trading volume, particularly from institutional investors with deep pockets.
At the time of writing, CME had processed 670 contracts — each equivalent to 5 bitcoins — which translates into approximately $64 million worth of volume at the current bitcoin spot price. Nearly all of that volume was concentrated in January futures, which traded as high as $20,650 and as low as $18,345.
At present, January futures are priced at $19,550, representing a $1,100 decrease from the contract’s opening bid but about $300 worth of upside from the present bitcoin spot price.
Bitcoin Price Trades Down Toward $19,000
The bitcoin price had rallied toward $20,000 over the weekend in anticipation of the futures launch — eventually peaking at $19,891 on Bitfinex — but it entered decline shortly after the market opened.
By late Sunday evening, the bitcoin price had dropped as low as $18,010, but it began to recover leading into Monday morning. At present, the bitcoin price is trading at $19,202, according to the CCN price index, which represents a single-day decline of three percent and translates into a market cap of $321.6 billion.
The global average bitcoin price continues to trade several hundred dollars higher, buttressed by significant premiums on Asian exchanges Bithumb and bitFlyer.
All Bark No Bite
Although the bitcoin price traded down following its debut on CME’s futures market, it is significant that the market was not immediately flooded with bearish traders taking up short positions.
This may be because brokerage firms have taken a cautious approach to bitcoin futures, requiring traders to maintain extraordinary margins and in some cases barring access completely.
However, it may also signify that despite vocal pronouncements to the contrary, bitcoin skeptics are not quite as bearish as they would like the public to believe.
Write to Josiah Wilmoth at josiah.wilmoth(at)cryptocoinsnews.com