The spot price of bitcoin pared losses after futures began trading in Chicago, ushering in a new era for the cryptocurrency. TradeStation is offering Bitcoin futures trading from day one, requiring 150% of the margin that the CBOE is demanding, t.e. about 66 percent.
Bitcoin earlier hit a record high of $17,270.
Writing in a blog post last week, Coinbase's co-founder and chief executive Brian Armstrong, said despite "sizeable and ongoing" increases in the firm's technical infrastructure and engineering staff, access to Coinbase services could become "degraded or unavailable during times of significant volatility or volume".
"It was smooth, and Bitcoin traders don't seem to be put off by futures", said Craig Erlam, senior market analyst in London at online trading firm Oanda.
Taylor believes that based on his charts, bitcoin has not yet peaked, but as soon as the "upmove ends, it will crash". What futures prices will not tell us is the dispersion of expectations and their probabilities.
But the derivative that would really damp the current crypto frenzy and make digital tokens a speculator-friendly - if not investment-worthy - commodity, currency, tulip, or whatever, isn't futures.
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".
With bitcoin, there's nothing like that.
This has been making the rounds since long.
Institutional investors are staying out of the market amid increasing worries about the clearing of the contract.
In Hong Kong, the Hang Seng Index edged up 0.54 percent to 28,465 at midday, turning a recent downward trend.
As of early afternoon trading in New York, 3,951 one-month contracts had changed hands, meaning around $73.1 million had been notionally traded.
He then compared the characteristics of bitcoin to gold.
Bitcoin is, seemingly, the cryptocurrency that can do no wrong. A month ago, it was less than $8,000.
He also warned investors "should take note" that the underlying bitcoin market is "relatively nascent" and remains "largely unregulated". These could be options on futures contracts and index funds (ETFs).
Here are some of the differences between the products offered by the exchange operators.
The futures are cash-settled contracts based on the auction price of bitcoin in U.S. dollars on the Gemini Exchange, which is owned and operated by virtual currency entrepreneurs Cameron and Tyler Winklevoss.
Cboe's future contracts, which trade under the ticker XBT, allow investors to bet on the future price of bitcoin.
The association said that a "more thorough and considered process" would have allowed exchanges and trading clearinghouses more time to study ways to protect against extreme price swings. One opportunity could be arbitrage, exploiting the pricing discrepancies.