The Worlds Largest FX Exchange CME Group Hopes to Tame Bitcoin Volatility
CME Group is reportedly launching bitcoin-based features before year end. The company has already released the BTC features specs giving more details providing details on how the fund will be traded. The contract specifications include a contract unit of five bitcoin defined by the CME CF Bitcoin Reference Rate (BRR).
The CME product codes will be called BTC BTC: BTB. More to it can trade with other options during the CME Globex and CME ClearPort trading time. The bitcoin future aspects have explained that “Trading will expire at p.m. London on the last trading day. More to that position limits are set at10, 000 contracts.”
They went on to say that, “The accountability position level of 5,000 contracts will apply to positions in single months outside the spot month and all months in combination. The reportable level will have 25 contracts.
Investors will, however, be interested to know how CME will solve the Bitcoin price fluctuation. This is whether they will create limits or through any other process.
There will be detail threshold according to Wall Street Journal that will initiate when the value of its Bitcoin futures change by 7%, 13%, and 20%.The beginning two thresholds are for soft limits which could trigger a two minute stop in trading of Bitcoin futures. According to one familiar investor, “the 20% limit is a hard cap on how far CME’s bitcoin future could change in one day.”
Bitcoin Represents Change Examination
On the day CME released its futures aspects the CME chairman, Leo Melamed told reporters that Bitcoin was becoming the newest asset class. Melamed is adamant that mainstream investors will greatly be involved in Bitcoin futures and will help control the decentralized currency markets. He went on to explain that “this is a very important step in Bitcoins history. Our company will regulate Bitcoin to make Bitcoin not world. We will tame Bitcoin into a regular type of instrument that trade with rules.”
The CME executive had said at first that their Chairman was not convinced that Bitcoin had special features. After understanding the functionality of Bitcoin, he was amazed. In fact, he compared it when he helped launch International Monetary Market Currency futures in 1972.
“Back in the 1970’s the world did not see currency trading as a valid instrument of finance. I also did believe in Bitcoin trading, but now I am learning, and I want to know more. Melamed said. “My entire life is centered under new technology. I have never run away from technology neither have I ever turned technology down. When you turn down technology, you are similar to a dead person. I have never changed in change examination, and change is what Bitcoin represents.”
Competitors of CME Group eyes $1.6B in Revenue Opportunities
Ledger X’s is ahead of the CME Group as the firm just started swapping millions worth of Bitcoin options. Another company the Chicago Board Options Exchange (Cboe) is eyeing around $1.6B in revenue opportunities by jumping into Bitcoin futures. In fact, Cboe has already contacted the Bitcoin trading platform Gemini to capitalize on its options in the market.