Bitcoin Surges To New Record High As CME Launches Bitcoin Futures In Q4

Tyler Durden's picture

As the mainstream continues to embrace cryptocurrencies - much to the chagrin of Jamie Dimon et al. in the establishment - CME Group is "responding to client interest" and launching a Bitcoin Futures contract in Q4.

CME Group says new contract will be cash-settled, based on the CME CF Bitcoin Reference Rate (BRR) which serves as a once-a-day reference rate of the U.S. dollar price of bitcoin.

This news has sent Bitcoin back up to record highs...

Full CME Statement:

CME Group, the world's leading and most diverse derivatives marketplace, today announced it intends to launch bitcoin futures in the fourth quarter of 2017, pending all relevant regulatory review periods.

The new contract will be cash-settled, based on the CME CF Bitcoin Reference Rate (BRR) which serves as a once-a-day reference rate of the U.S. dollar price of bitcoin.  Bitcoin futures will be listed on and subject to the rules of CME.

"Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract," said Terry Duffy, CME Group Chairman and Chief Executive Officer. 


"As the world's largest regulated FX marketplace, CME Group is the natural home for this new vehicle that will provide investors with transparency, price discovery and risk transfer capabilities."

Since November 2016, CME Group and Crypto Facilities Ltd. have calculated and published the BRR, which aggregates the trade flow of major bitcoin spot exchanges during a calculation window into the U.S. Dollar price of one bitcoin as of 4:00 p.m. London time. The BRR is designed around the IOSCO Principles for Financial Benchmarks. Bitstamp, GDAX, itBit and Kraken are the constituent exchanges that currently contribute the pricing data for calculating the BRR.

"We are excited to work with CME Group on this product and see the BRR used as the settlement mechanism of this important product," said Dr.Timo Schlaefer, CEO of Crypto Facilities.


"The BRR has proven to reliably and transparently reflect global bitcoin-dollar trading and has become the price reference of choice for financial institutions, trading firms and data providers worldwide."

CME Group and Crypto Facilities Ltd. also publish the CME CF Bitcoin Real Time Index (BRTI) to provide price transparency to the spot bitcoin market.  The BRTI combines global demand to buy and sell bitcoin into a consolidated order book and reflects the fair, instantaneous U.S. dollar price of bitcoin in a spot price. The BRTI is published in real time and is suitable for marking portfolios, executing intra-day bitcoin transactions and risk management.

Cryptocurrency market capitalization has grown in recent years to $172 billion, with bitcoin representing more than 54 percent of that total, or $94 billion.  The bitcoin spot market has also grown to trade roughly $1.5 billion in notional value each day.

*  *  *
As CoinTelegraph noted previously, mainstream exchange embrace of Bitcoin could lead to less volatility and further acceptance and new opportunities.

In what can be seen as a mainstream financial world’s embrace of Bitcoin, the Chicago Mercantile Exchange (CME Group) and Intercontinental Exchange Inc. (ICE) are all set to publish data on prices of Bitcoin. CME Group is likely to start publishing this data in the fourth quarter of 2016 while ICE, the owner of the New York Stock Exchange (NYSE) is considering if it should include data from various exchanges for a daily settlement price which it has been publishing since May of 2015.

Recently Dwijen Gandhi of ICE told Reuters that NYSE will soon launch a real-time pricing index which he said would provide additional transparency and insight into the Bitcoin price.

CME Group plans two new Bitcoin products

CME Group and ICE taking the Bitcoin dive is good news for the newly established ‘Digital Asset Class’. The participation of exchanges would allow investors and traders alike to easily acquire the information that they need to trade Bitcoin with more confidence.

According to a press release dated May 2, 2016, the CME group has said that they will collaborate with Crypto Facilities Ltd, a digital assets trading platform, and that they will be developing two new products which they plan to launch by Q4, 2016.

CME CF Bitcoin Reference Rate (BRR), which will provide a final settlement price in US dollars at 4 PM London Time on each trading day and the CME Bitcoin Real Time Index (RTI), which allows for real time access to Bitcoin prices.

Cointelegraph talked with Sandra Ro, Executive Director at CME Group about how these developments would affect Bitcoin prices and she says:

“There is no current bitcoin reference rate which is considered “standard” market convention. There are many real time indices but we believe our methodology, inclusion of only the most serious bitcoin exchange data, and focus on developing digital assets will add significant credibility to the nascent digital asset market.”

It is notable that RTI will be calculated by Crypto Facilities and will be calculated  based on global demand to buy and sell Bitcoin aggregated into a consolidated order book.

The Price of Bitcoin will be in US dollar terms and will be published once every second according to data made available by CME on the website.

NYSE Bitcoin index NYXBT

On the other hand, the New York Stock Exchange has already wet its feet in the Bitcoin pool by launching the NYSE Bitcoin Index (NYXBT). NYXBT is the first ever exchange-calculated and disseminated Bitcoin index according to ICE.

NYXBT uses a ‘unique methodology’ according to the ICE press release which relies on “rules-based logic to analyse a dataset of matched transactions and verify the integrity of the data to ultimately produce an objective and fair value for one Bitcoin in US Dollars at 4 pm London Time.”

NYXBT will at first take data from transactions from the Coinbase exchange. It is pertinent to mention here that NYSE had made a minority investment in Coinbase in 2015.

Thomas Farley, NYSE Group President, says:

“As a global index leader and administrator of ICE LIBOR, ICE Futures U.S. Dollar Index and many other notable benchmarks, we are pleased to bring transparency to this market. By combining our technology infrastructure with our expertise in index calculation and data management, we will continue to launch complementary products based on our rigorous standards and proprietary index methodology.”

Expect more mainstream participation and new products

It seems that the mainstream financial world is finally ready for Bitcoin. This could mean a new era in which Bitcoin could actually become THE digital asset class and could also lead to further delivery of new financial products for traders and investors.

Cointelegraph talked with Fran Strajnar, Founder and chief executive officer of BraveNewCoin (BNC), an institutional Digital Asset Data provider. Strajnar is excited about these new developments.

Strajnar says to CoinTelegraph:

“What Bitcoin and the entire Digital Asset Class needs to hit mainstream is not just consumer and application adoption but financial infrastructure and the adoption of quality market data services, by well established trading platforms.”

He added that BNC itself provides market data and indexing solutions.

As for opportunities for traders in the form of new products, he thinks that because Bitcoin is global, functions like nothing else and requires a global spot price.

Strajnar expects to see two things evolve from CME’s Bitcoin reference rollout in Q4:

  1. Creation of various Derivative products & further ETF potential, which will help with reducing volatility.
  2. A disparity between US Dollar denominated Bitcoin trading activity and other BTC trading pairs, seeing as the CME index only includes BTC/USD trading. A good arbitrage opportunity will come out of this.


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VD's picture

deep state trial ballloon for cashless is all this is, and of course to punish the speculators when the plug gets pulled.


the useful idiots here want more useful idiots to go all in, bc they know they're pumping a crypt0-ponzi and hard -- why else live on this website and post 24/7/365? unless cass sunstein or his people are paying them to post here, which i'm starting to suspect might be the case. (think about it, we have the silver bagholder who screamed day & night here years ago to buy silver and crash jpm as jpm pulled the plug on them, and this very same bagholder is doing the exact same thing w/ this scam, only btc is like the silver con on steroids -- "eazy money" cum gitit! & they clearly do not understand what money actually is; hint: itz exceedingly simple actually, so simple that they can't see it for what it is.)

Spaced Out's picture

Wow, you have an easy job. All over in 8 minutes? LOL

brexiteer's picture

The irony.  I think you'll find that a lot of posters who are pro crypto here actually want to break the back of the central banking system.  What's your reason?  my precious...

brexiteer's picture

Consider it an investment in the end of the central banking system and debt money.  I will quite happily get paid in btc save for retirement and draw down for an income kind of like grandpa used to do before he had the rug pulled out from under him.

aloha_snakbar's picture

Bitcon gave me herpes...true story...

0valueleft's picture

Letting your Momma off the hook?

0valueleft's picture

LTC about to become the cool kid, BTC about to become Facebook?  Adjust your wallets accordingly and cautiously. Diversity will most likely prevail.

Spectre's picture

This will mark the end for Bitcoin, just like GLD & SLV.  It will be manipulation and an algorythm death spiral.  Control by the "Big Houses".  Party over.

brexiteer's picture

Nah, party's just beginning.

Spaced Out's picture

Are you saying the party's over for pm's? Careful, you'll have all the oldbugs down on you like a ton of gold bars.

FreeNewEnergy's picture

There's nothing backing bitcoin, so playing derivatives should equal the following:

0 x 12300 = 0.

It's a zero sum game. Now I get it, but, I'm still not buying bitcoin, or even a fraction of a bitcoin or a derivative bet on bitcoin.

The world is complicated enough without currencies which only .0001% of the poulation properly understands.

Seriously, if somebody said, I'll give you $6300 US cash, or one bitcoin, which would you take?

Told you so.

tmosley's picture

Money doesn't need backing.

Futures has been available for bitcoin and other crypto for at least a year.

0valueleft's picture

Easy question: are you taking this new fiat windfall you recently touted and plowing it in BTC on the this news?

tmosley's picture

Nah, waiting for the next dip. Don't like buying at all time highs.

NaiLib's picture

Bitcoin is backed but the fundamental knowledge that Fiat currencies are printed in indefinite amounts.


Spaced Out's picture

Where's your free energy going to come from then?

Yellow_Snow's picture

No, now you have to give me $6430... It went up while you posted

PumpherDumper's picture

But, but, but,... I thought it was a fraud!  Jamie said so!!


The CME magnates will be unpleasantly surprised that their indices will not be considered by coinmarketcap, et al.


FreeNewEnergy's picture

Bitcoin isn't really currency because it isn't backed by anything. Besides, the value of a bitcoin is unknown.

bitcoin x unknown value variable = unknown bitcoin value.

Why would anybody invest in that?

Bitcoin is worse than physical cash, PMs, stocks, bonds, even plain white paper for your copier.

It has ZERO value.

Do you want a bitcoin or a used car? A necklace? 10 pounds of chicken? 378 ounces of silver?

Go ahead. Buy more bitcoin at the inflated price. Go ahead. Go on.

I thought so.

Yellow_Snow's picture

Fortunately, a lot of folks totally disagree with you...

But on the positive, Jamie 'gangster' Dimon is on your side... You have a good friend there

spqrusa's picture

It has zero value to you. To the non-luddites it is a global value transfer system which is not managed by the Banksters and their demonic horde known as .GOV

aloha_snakbar's picture

CME Group is "responding to client interest" and launching a Bitcoin Futures contract in Q4


LULZ....This is the ONLY thing Bitcon will ever have in common with the PM's.. the monkey hammer...

FreeNewEnergy's picture


Money doesn't need backing.

True, at least in America, since 1971, 1933 or 1913, take your pick. That doesn't make it true anywhere else, unless, or course, you like doing things like skydiving without a parachute, running headlong into brick walls or holding your breath until you expire. Bu...bu...bu...bubble. Free tulips for everyone.
brexiteer's picture

No he's right, I just checked, our money doesn't need any backing in the UK either.  Out of interest, what planet are you on?  

tmosley's picture

>Paper rectangles are money

>Not the gold that backed them


bluskyes's picture

I always thought the "C" in CME stood for commodities. Silly me, it was casino all along.


NaiLib's picture

STill waiting for the first CB to officially announce they are buying, or have bought

aloha_snakbar's picture

Breaking News

The CDC has published a new study in which scientists have discovered
that contact with so called "cryptocurrencies" can cause a virus which
can lead to cancer. They have named this new bug 'DumbBug17'

Film at Eleven

Spaced Out's picture

I don't watch the dumbfuck channel.

Jtrillian's picture

CME derivatives based bitcoin futures contract will NOT BE GOOD for bitcoin.  They will attempt to supress the true price of bitcoin the same way they have with precious metals.  You can bank on that.

markar's picture

Bingo. this spells big trouble for this bubble.

cat2005's picture

Exactly my thinking!

Do these sick fuckers leave anything alone?

How ironic that the technology and asset (blockchain & crypto currency) supposedly destined to deliver us from abusive governments and corporations is now falling victim to those very forces.

I love the idea of distributed computing but no decentalized program is safe from these fuckers. These fuckers control the legal and financial power.

If these fuckers don’t like something then they either outlaw it or co-opt it with so much intervention.

More secretive crypto like Monero, etc will like be banned but you can bet the government and corporations will allow themselves access.

Less secretive crypto like Bitcoin will be co-opted.

Technology won’t save us from evil people.

Good people will.

I think that means we are fucked. LOL.

Dirty Bumn's picture

After eight years since inception, Bitcoin has yet to be a positive influence in my life. All I get are bickering assholes like tmosley and crew telling me how awesome Bitcoin is gonna be someday. If Bitcoin doesn't change the way we do business and change our lives for the better soon, I will be very dissappointed.

tmosley's picture

>Starts shit constantly

>Complains about all the fighting


Spaced Out's picture

You should have bought some, instead of just reading about it :(

JibjeResearch's picture

Are you trying to sell BAaha ahahahhahaa

Exponere Mendaces's picture

The only person holding yourself back is you.

If you had Bitcoin, you wouldn't be bitching about how its done nothing.

Its done plenty for me, and TMosely and Fonestar - remember him? He was fucking right and you clowns kept badgering him until he said "Fuck it."

But that's par for the course in the ZH comment section. Maybe 5% of the people here understand what is going on.

The rest should drink their milk and take a nap.


WillyGroper's picture

crypto's gone fractional.


JibjeResearch's picture

 ahah ahahh ahaha.... that's funny eheheh

jamesmmu's picture

I own few bitcoins, but something makes me wonder if this is approaching toward a disaster.


Lately, so many Great news about bitcoin keep appearing on the media outlet, its like they aggregating all bitcoin related news on purpose to speculate/manipulate the price. so ppl who already hold alot of bitcoin will get richer. Is there any bad news about bitcoin? just one year, bitcoin is already supress alot of giant company combined, and billions of money keep going in there. It really sounds like Enron. Who will be the first one to question this insane rally in bitcoin price? More and more Great and greater bitcoin news flooding into the market to pop up the price, ZH need to investigate this or risk many folks into enron like scam. FYI, bitcoin started off a great mission, a great invention for a currency, but greedy folks making it like a scam and keep sucking the money. 

kochevnik's picture

People moving into hard assets, away from Jew toilet paper debt notes.  Saving proceeds of financialization bubble in deep freeze until present economy reset/collapsed/nuked

kavabanga's picture
Bitcoin History of Price Crashes The future is an echo of the past. Understanding how time works, what patterns repeat, within what bounderies reality or trading plays is key to predicting the future. TA is not a golden ticket to know the future, it is an excellent tool to provide us with a good rational idea of where potential resistance and support in the future may lie. Apply some probability and we can make a good average guess. 
I put these three historical events next to each other so we can learn the correlations and get a better grasp how to react and trade. 
What I see is that once we make an all time high, the .618 levels is an important support level and when broken some serious dumping occurs. See what correlations you can find yourself, hope it helps!
Spaced Out's picture

Two things:

1/ TA is of limited value when whales can push the market around at will. I know numerous traditional market traders who have got burned in crypto by applying usual strategies.

2/ Judging by a lot of peanut comments here, they would never be able to grasp the technicalities anyway.

ludwigvmises's picture

CME marking the top perfectly. Great timing.

Exponere Mendaces's picture

Plenty of markets you can use to short.

Give us a timestamp of your trade so we can laugh at you blowing up later.


Bill of Rights's picture

This is the Tmosly Bitcunt thread...

Spaced Out's picture

That's why you are here :D