The New York Stock Exchange, the owner of the New York Stock Exchange, launched its bitcoin futures contracts late Sunday, in a move aimed at luring investors who have hesitated to trade cryptocurrency.
The first trade in the new contracts was made on ICE's futures exchange at 20:02 ET at a price of $ 10,115, Bakkt, the company behind the contracts, said in a Twitter post. Bakkt is an ICE-supported business that aims to make trading and payment with cryptocurrencies viable for both retail and institutional investors.
Futures are physically deliverable, meaning they pay out in bitcoin at settlement. It's different than ICE competitor CME Group, which introduced its own futures contracts for the digital currency in 201
Cryptocurrency fans will hope that ICE's federally regulated bitcoin futures can give much sought-after legitimacy to an asset class that has been embroiled in controversy following illegal activity in the emerging industry.
Bitcoin is also known for its wild volatility – for example, a late bubble in 2017 that caused prices to rise close to $ 20,000 dollars the following year. Since then, cryptocurrency has been on the rise this year, with experts attributing the price jump to big companies like ICE and Facebook, with its planned libra cryptocurrency, and getting involved in the space.
Futures contracts, legal agreements to buy or sell a commodity at a certain price and time, are a way for investors to bet whether the value of the underlying asset will rise or fall. In ICE's case, investors can trade in daily or monthly futures, according to the website.
Bakkt, which partnered with ICE to launch the derivatives, also counts Microsoft venture arm M12 and Boston Consulting Group as investors. The company teamed up with the Starbucks coffee chain last year to let people and institutions buy, sell, store and send cryptocurrency.
Attempts to launch bitcoin futures have been met with problems lately. Cboe Global Markets, which launched its own contracts in late 2017, said earlier this year that they would stop adding new ones. Meanwhile, US firm LedgerX was forced to trace back from a launch of physically settled bitcoin futures after a key market regulator said it "had not yet been approved."
ICE's move was met with a mostly lukewarm response in spot markets, with bitcoin's price rising only 0.5% higher to about $ 9,950.