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Money Volatility set to play havoc with bitcoin futures

11:00  12 december  2017
11:00  12 december  2017 Source:   smh.com.au

Iron ore markets remain wild, rivalling the volatility seen in Bitcoin in recent days

  Iron ore markets remain wild, rivalling the volatility seen in Bitcoin in recent days The price swings across iron ore markets remain wild, rivalling those seen in Bitcoin in recent days. The price swings across iron ore markets remain wild, rivalling those seen in Bitcoin in recent days.

Bitcoin prices swung wildly over the weekend, heightening concerns that the new futures markets might struggle. Last week, the Futures Industry Association – a group of major banks, brokers and traders –argued this volatility on current bitcoin exchanges endangers traders who may have to pay

Bitcoin futures set to begin trading on the Cboe at 6 p.m. ET on Sunday, and CME will open bitcoin futures trading on Dec. Bitcoin Futures Are Here, Adding Speculation Amid Volatility And - www.forbes.com. In the days leading up to the launch of Bitcoin futures by the Chicago Board

Dramatic price swings of more than 20 per cent have become relatively commonplace in recent months.© Shutterstock Dramatic price swings of more than 20 per cent have become relatively commonplace in recent months.

Futures in the manic cryptocurrency markets begin trading on Monday after an extremely volatile weekend that saw the price of bitcoin crumble 25 per cent from last week's record highs.

The most well known cryptocurrency erased almost a fifth of its value on Friday after touching an all-time high of $US17,117. Bitcoin prices retraced sharply over the weekend and traders could buy at $US13,459 on Sunday afternoon.

Exuberant retail investors have poured billions of dollars into bitcoin in recent weeks, spurred on by the news that Cboe Global Markets and CMC Markets are launching the first regulated products pegged to the cryptocurrency.

Bitcoin futures are about to go live, and they could change the game for cryptocurrencies

  Bitcoin futures are about to go live, and they could change the game for cryptocurrencies Cboe Global Markets' bitcoin futures product launches Sunday. The product will allow investors to bet on the coin's future price and could open the door to wider-participation in the market by retail investors and institutions.Just when you thought you finally got your head around bitcoin, along comes a new bitcoin-linked financial product: bitcoin futures.

The Bitcoin Volatility Index tracks Bitcoin 's volatility vs other currencies like USD, EUR, GBP and more. How volatile is Bitcoin relative to gold and other currencies? For comparison, the volatility of gold averages around 1.2%, while other major currencies average between 0.5% and 1.0%.

The Bitcoin Volatility Index calculates and displays the historical volatility of the Bitcoin price, as well as that of Litecoin, in specific timeframes and more. Both sources may change in the future . The price and accuracy of the calculations are expected to continually improve after Q2 2018.

The two exchanges received permission to offer the contracts after pledging to the US Commodity Futures Trading Commission that trading bitcoin derivatives will not contravene any existing laws.

Futures are financial contracts where a buyer purchases an asset or a seller sells an asset at a predetermined future date and price.

But while investors are enthusiastic that institutional investors may start to bring liquidity and price stability to the fledgling market through an official product, there are some who are wary of how extreme volatility, like that over the weekend, may distort the futures market.

In a bid to curtail volatility, CME's futures contracts have price limits of 20 per cent above or below bitcoin's reference point, which mean traders are unable to capitalise on swings greater than that.

South Korea has reportedly banned bitcoin futures

  South Korea has reportedly banned bitcoin futures South Korea has banned securities firms from handling bitcoin futures. Exchange operator Cboe launched first bitcoin futures on Sunday night. Huge demand for the product crashed Cboe's website and sent prices jumping.Business Korea reported that the Financial Services Commission of Korea issued a directive banning securities firms from taking part in bitcoin futures transactions, citing sources.

The Cboe will launch futures trading in bitcoin at 6 p.m. ET on Sunday. The ticker symbol will be XBT. Since the interest level is so high, let's try to answer a few basic questions on how this will work. So how does this work? The Cboe will start by listing three near-term serial months.

Trading in bitcoin futures began Sunday on the CBOE. CME is scheduled to launch its bitcoin futures product on Dec. The day after Bitcoin futures made their highly anticipated market debut on the world’s largest U.S. options exchange, Bitcoin ’s price volatility is continuing its days-long run as the

"Having limits on the derivatives rather than the base asset is counterproductive because it reduces effectiveness of the futures instrument," said Bharath Rao, chief executive of Leverj, a cryptocurrency trading platform.

Cboe halts trading for two minutes if prices rise or fall 10 per cent, and a five-minute halt kicks in at 20 per cent.

But dramatic price swings of more than 20 per cent have become relatively commonplace in recent months.

Further compounding volatility risks is the concentration of bitcoin ownership; the top 100 wallet holders control 40 per cent of all available bitcoins.

Should these large investors – sometimes referred to as whales – move a sizeable holding, this often causes widespread ructions throughout the market.

Last week, the Futures Industry Association – a group of major banks, brokers and traders –argued this volatility on current bitcoin exchanges endangers traders who may have to pay for outstanding contracts should the price move dramatically.

The Winklevoss twins think bitcoin could 'go up another 20 times' and trounce gold

  The Winklevoss twins think bitcoin could 'go up another 20 times' and trounce gold The Winklevoss twins think bitcoin could appreciate 20 times and trounce gold. Others say the cryptocurrency is in a bubble. Traders in the new bitcoin futures market appear bullish on the red-hot coin. Contracts for the January futures contract on Cboe Global Markets were trading well-above the spot market for bitcoin, at over $US17,500 a coin on Monday.But most traders are nowhere near as bullish as the Winklevoss twins. Tyler and Cameron Winklevoss, whose bitcoin holdings are worth more than $US1 billion, told Fox Business Monday the coin could reach well above $US300,000 a coin.

Two exchanges in Chicago are set to launch Bitcoin futures . Wall Street Journal Reporter Alex Osipovich explains what that means for the future of Alex Friday's approval from the U S Commodity Futures Trading Commission it clears the way for these exchanges to launch bitcoin futures later

The popularity of Bitcoin is set to increase as major financial institutions launch their Bitcoin futures contracts. However, others believe that Bitcoin futures is a great way to encourage mainstream adoption. This is because potential investors will not have to buy the increasingly expensive actual

"The recent volatility in these markets has underscored the importance of setting these levels and processes appropriately and conservatively," wrote Walt Lukken, chief executive of the Futures Industry Association, in an open letter.

Cboe's contracts will be based off the price of bitcoin on the Gemini Exchange. CME is using four exchanges.

Both contracts will be purchased and settled in cash, so buyers don't ever deal in actual bitcoin, alleviating the risk (legal or otherwise) of holding the cryptocurrency.

However severe price movements have highlighted the vulnerability of the world's biggest bitcoin exchanges, which remains a key risk for crypto-investors.

Coinbase and IG Group experienced technical difficulties over the weekend after bitcoin's price shot up then crashed within 20 minutes.

And given the bitcoin exchanges operate outside the existing legal system, they constantly face trading disruptions, withdrawal freezes and hacks.

Bitcoin has risen more than 1,500 per cent this year and over 85 per cent in the last fortnight alone.

Bitcoin prices have slumped as Bitcoin Cash skyrockets .
Bitcoin prices fell sharply this morning, as a flood of money <g class="gr_ gr_4 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar multiReplace" data-gr-id="4" id="4">moved</g> into Bitcoin Cash.Prices have fluctuated wildly, but a short time ago Bitcoin briefly dipped below $US16,000 on the composite index provided by Coindesk.com -- a fall of more than $US2,000 from yesterday's prices.

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