CME Group has just revealed a plan to launch Bitcoin futures by the end of 2017, pending all relevant regulatory review periods. The price has quickly jumped back over the $6350 record high in response to the announcement. This is an apparent reversal of policy by CME, which just a month ago said that Bitcoin futures are not expected in the near future.
The new contract will be cash-settled, based on the CME CF Bitcoin Reference Rate (BRR) which serves as a once-a-day reference rate of the US dollar price of Bitcoin. Bitstamp, GDAX, itBit and Kraken are the constituent exchanges that currently contribute the pricing data for calculating the BRR.
“Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract,” said Terry Duffy, CME Group Chairman and Chief Executive Officer. “As the world’s largest regulated FX marketplace, CME Group is the natural home for this new vehicle that will provide investors with transparency, price discovery and risk transfer capabilities.”
Since November 2016, CME Group and Crypto Facilities Ltd. have calculated and published the BRR.
“We are excited to work with CME Group on this product and see the BRR used as the settlement mechanism of this important product,” said Dr. Timo Schlaefer, CEO of Crypto Facilities. “The BRR has proven to reliably and transparently reflect global bitcoin-dollar trading and has become the price reference of choice for financial institutions, trading firms and data providers worldwide.”