CBOE to launch bitcoin futures trading Sunday

Bitcoin logos are displayed at the Inside Bitcoins conference and trade show in New York in April 2014

Bitcoin logos are displayed at the Inside Bitcoins conference and trade show in New York in April 2014

CME Group and CBOE Global Markets exchanges will offer investors Bitcoin futures from later this month.

The CBOE Futures Exchange will start trading bitcoin futures Sunday, making it the first traditional exchange to allow investors to bet on the future price of the digital currency.

CME, which owns various derivative trading platforms such as the Chicago Mercantile Exchange, said in a statement on Friday that there will be risk-management measures in place as bitcoin is a "new, uncharted market".

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CME had announced last week that it would begin bitcoin futures trading on December 18.

Cryptocurrency that trades 24 hours a day and seven days a week, climbed as high as $11,799.99 on the Luxembourg-based Bitstamp exchange.

The move also comes amid a time of climbing prices of bitcoin.

The bitcoin mania doesn't seem to be losing steam, despite repeated regulatory blows - especially in China - and growing more than tenfold in value from the beginning of this year. XBTSM futures are cash-settled contracts based on Gemini's auction price for bitcoin. Bitcoin itself is now bought and sold on platforms that are virtually unregulated, which has made some money managers uncomfortable with the market even as prices soar.

According to the official release, CME Group has self-certified the initial listing of its Bitcoin futures contract, which will be listed on and subject to the rules of CME. But there are a couple of differences between bitcoin futures trading at the two exchanges.

The Commodity Futures Trading Commission said it had discussions with the exchanges to protect consumers from extreme price swings.

However, despite the cash-settlement process, some institutional investors have expressed concern at the addition of bitcoin-derived products to CME. One bitcoin was worth just a fraction of a penny when it started trading in 2010, and by the start of this year was worth $1,000.

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