Tag Archives: BTC

All You Need To Know About Today’s Bitcoin Futures Contract

CBOE Global Markets Inc and CME Group Inc will launch futures contracts on bitcoin on Dec. 10 and Dec. 17 respectively. Here are some of the differences between the products to be offered by the exchange operators.

CONTRACT UNIT

  • The CBOE Bitcoin Futures Contract will use the ticker XBT and will equal one bitcoin.
  • The CME Bitcoin Futures Contract will use the ticker BTC and will equal five bitcoins.

PRICING AND SETTLEMENT

  • Both Cboe’s and CME’s bitcoin futures contracts will be settled in U.S. dollars, allowing exposure to the bitcoin without actually having to hold any of the cryptocurrency.
  • Cboe’s contract will be priced off of a single auction at 4 p.m. Eastern time (2100 GMT) on the final settlement date on the Gemini cryptocurrency exchange.
  • CME’s contract will be priced off of the CME Bitcoin Reference Rate, an index that references pricing data from cryptocurrency exchanges, currently made up of Bitstamp, GDAX, itBit and Kraken.

TRADING HOURS

  • Cboe’s XBT contract will trade on CFE, with regular trading hours of 9:30 a.m. to 4:15 p.m. Eastern time on Mondays and 9:30 a.m. to 4:15 p.m Tuesday through Friday. Extended hours will be 6 p.m. Sunday to 9:30 a.m. Monday, and 4:30 p.m. Monday through to 9:30 a.m. Friday.
  • CME’s BTC will trade on CME Globex and CME ClearPort Sunday to Friday from 6 p.m. – 5 p.m. Eastern time with a one-hour break each day beginning at 5 p.m.

MARGIN RATE AND CLEARING

  • Cboe’s contract will clear through the Options Clearing Corporation and a 44 percent margin rate will apply.
  • CME’s contract will clear through CME ClearPort and will have a 35 percent initial margin rate.

CONTRACT EXPIRATIONS

  • Cboe said it may list up to four weekly contracts, three near-term serial months, and three months on the March quarterly cycle.
  • CME said it will list monthly contracts for the nearest two months in the March quarterly cycle (March, June, Sept., Dec.) plus the nearest two serial months not in the March quarterly cycle.

PRICE LIMITS AND TRADING HALTS

  • Cboe will halt trading in its contract for 2 minutes if the best bid in the XBT futures contract closest to expiration is 10 percent or more above or below the daily settlement price of that contract on the prior business day.
  • Once trading resumes, if the best bid in the XBT futures contract closest to expiration is 20 percent or more above or below the daily settlement price of that contract on the prior business day, the futures will be halted for 5 minutes.
  • CME will apply price limits, also known as circuit breakers, to its bitcoin futures of 7 percent, 13 percent, and 20 percent to the futures fixing price. Trading will not be allowed outside of the 20 percent price limit.

Sources: ZeroHedge | Reuters, CBOE and CME

Billionaire Peter Thiel: “Bitcoin’s Harder To Mine Than Gold… Has Great Potential”

Outspoken billionaire investor Peter Thiel told attendees at the Future Investment Initiative in Riyadh, Saudi Arabia, that people are “underestimating” bitcoin and that it has “great potential left,” comparing the cryptocurrency bitcoin to gold.

In his remarks, Thiel said that while he is “skeptical of most [cryptocurrencies],” he believes bitcoin has a promising future depending on the trajectory it takes…

“I’m skeptical of most of them (cryptocurrencies), I do think people who criticize are a little bit… underestimating bitcoin especially because… it’s like a reserve form of money, it’s like gold, and it’s just a store of value. You don’t need to use it to make payments,” Thiel said.

The PayPal founder and venture capitalist compared some of bitcoin’s features to gold.

“If bitcoin ends up being the cyber equivalent of gold and it has a great potential left and it’s a very different kind of thing from what people in Silicon Valley focus on – companies, not algorithms not protocols, but this might be maybe one exception that is very underestimated,” the Silicon Valley elite said.

Even so, in Thiel’s opinion, like gold, it’s difficult to mine, making it more worthwhile…

“You can ask the same questions about gold. What is gold based on? Why is gold valuable?…

 

It’s a tangible asset but it’s also hard to mine. So if it was easy to mine then it wouldn’t be that valuable and we would just have way more gold.

So bitcoin is also, it’s mineable, like gold it’s hard to mine, it’s actually harder to mine than gold and so in that sense it’s more constrained,” he said.

In September, JPMorgan CEO Jamie Dimon famously called bitcoin a “fraud” and said it will eventually blow up.

“The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart,” Dimon said while speaking at an investor conference.

However, Thiel proposed a different take:

“The argument it’s based on is the security of the math which tells you it can never be diluted by government… it can’t be hacked and it’s a form of money that’s… secure in an absolute way.”

Source: ZeroHedge