CHICAGO, IL — Monday marks a historic day for trading after the Chicago Board Options Exchange began offering bitcoin futures Sunday. Investors are now able to speculate on whether bitcoin’s price will rise or fall. The futures don’t involve actual bitcoin, but function as securities that will track the price of bitcoin on Gemini.
Futures are a type of contract that involves a buyer and seller agreeing on a price for an item to be delivered on a certain date. Futures are used in commodities such as gold, wheat, soy and almost every type of security.
Unlike currencies, bitcoins aren’t backed by a central bank and exist only on computer servers. The digital currency has been rapidly gaining popularity around the world with investors, and bitcoin’s debut on CBOE has been seen by many as a step towards legitimizing the currency.
Traders saw about 1,800 bitcoin futures trade overnight and nearly 3,000 Monday morning, which gave the currency a boost by eight per cent in less than 10 minutes.
The debut is expected to be followed next week by a listing on the Chicago Mercantile Exchange.
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Kiichiro Sato/Associated Press