Bitcoin tops $18,000 in debut on major bourse | business news | Hindustan Times
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Bitcoin tops $18,000 in debut on major bourse

Bob Fitzsimmons, a futures manager at Wedbush Securities, described the opening as quiet and steady, as Cboe data showed around a thousand trades were made in the first two hours.

business Updated: Dec 11, 2017 13:21 IST
Agence France-Presse, New York
Bitcoin,Stock exchange,Bitcoin exchange
A Bitcoin (virtual currency) paper wallet with QR codes and a coin are seen in an illustration picture.(Reuters file)

Bitcoin surged past $18,000 after it began trading on its first major global exchange, the latest in a series of highs that have excited some investors while leaving others nervous of a bubble.

Trading of the controversial digital currency on a futures contract began at 6:00 pm (2300 GMT) on the Chicago board options exchange (Cboe) at a price of $15,000.

Heavy traffic made the Cboe website inaccessible in the first 20 minutes, but it said that “trading runs on very separate systems and was totally unaffected by the website issues.”

Around 0320 GMT, bitcoin was trading at $17,750 per unit for the futures contract expiring on January 17, thus exceeding the highest value it had reached on alternative non-regulated internet platforms. It even climbed past $18,000.

A futures contract is a financial product that allows investors to bet on whether the currency’s price will rise or fall.

Bob Fitzsimmons, a futures manager at Wedbush Securities, described the opening as “quiet and steady,” as Cboe data showed around a thousand trades were made in the first two hours.

The Cboe debut is expected to be followed a week later by a rival listing on Chicago Mercantile Exchange.

It marks the first opportunity for professional traders to invest in bitcoin, even as some steer away because of a lack of regulations surrounding the currency.

“It gives it legitimacy. It recognises that it’s an asset you can trade,” said Nick Colas, of Data Trek research.

Among those cheering the launch are the Winklevoss twins, who have been called the first bitcoin billionaires. Critics include financial commentator Jim Cramer, who warns that prices could tumble once the new trading venues open the door to “short sellers,” who bet on downward moves in assets.

The two launches were made possible after a key US regulator, the Commodities and Futures Trading Commission (CFTC), gave the green light to the exchanges on December 1, while warning “of the potentially high level of volatility and risk in trading these contracts.”

Anticipation of the first mainstream listings for the digital currency has been a catalyst for a sharp price increase in recent weeks. Bitcoin opened 2017 at around $1,000, surged past $10,000 for the first time last month and soared as high as $16,777 on Thursday before retreating somewhat.

The actual opening of the Cboe market, an electronic trading venue, was a low-key affair, lacking the pomp of an initial public offering, which is often marked by the new entrant ringing the bell of the New York Stock Exchange.

The embrace by mainstream exchanges of bitcoin futures marks a sea change from the days when the digital currency was associated with drug dealing and other illicit activities.

First Published: Dec 11, 2017 11:54 IST