On October 31, 2017, Bryan Durkin, President of CME Group Inc. declared that the launch of Bitcoin futures will happen in the fourth quarter of 2017.
“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 U.S. dollar price of Bitcoin. Bitcoin futures will be listed on and subject to the rules of CME.”
Pricing data will be provided by cryptocurrency exchanges like Bitstamp, GDAX, itBit, and Kraken.
Leo Melamed, chairman emeritus of the CME group, said that Bitcoin futures are a very important step in the history of this cryptocurrency. Melamed described that it might likely become a new asset class and major institutional investors will be attracted by this new asset.
“We’ll tame [Bitcoin] into a regular type instrument of trade with rules.”
Similarities between the cryptocurrency and financial futures were also noted by Melamed that had arisen in trading on the International Monetary Market in 1972 when he was posted as the Chairman of the Chicago Merc. Melamed said, “The world in the 1970s didn’t look at currency trading as a valid instrument of finance. I too went from not believing (in Bitcoin) to wanting to know more. My whole life is built [around] new technology. I never said no to technology. People who say no to technology are soon dead. I’m still that same guy who believes in, at least examining change. That’s what Bitcoin represents.”
Classifying cryptocurrency and tokens is comparatively hard based on conventional financial definitions. Melamed also agreed to the statement made by Brian Quintenz, CFTC commissioner that tokens may transform from securities into commodities and stressed that Bitcoin may emerge as its own asset class.
Cryptocurrency derivatives were not first introduced by the CME Group. LedgerX had begun listing swaps and put and call options for BTC/USD by mid-October this year. But, LedgerX follows strict rules in trading to limit market participants gain high net worth.