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CME Union, the $51 billion US-based financial institution and the world’s largest choices exchange, is set to finalize the integration of its bitcoin futures exchange by December 17, and reveal bitcoin futures for trading by December 18.
CME Receives Approval From CFTC
In an bona fide announcement, Terry Duffy, CME Group Chairman and CEO, revealed the company has come by the approval from the US Commodities and Futures Trading Commission (CFTC) to slate bitcoin futures and provide infrastructure around bitcoin options, derivatives, and expects contracts.
In the first few weeks of operation, traders on CME’s bitcoin futures the Market will be limited to initiating trades with an initial margin of 35 percent. Diverse risk management tools have been implemented onto CME’s bitcoin expects trading platform, given that it is a strictly regulated exchange handled by the CFTC.
“Though we have worked at the end of ones tether with a lengthy, comprehensive process with the CFTC to get to this point, we place bitcoin is a new, uncharted market that will continue to evolve, making continued collaboration with the Commission and our clients going forward. At shoot, our new Bitcoin futures contract will be subject to a variety of risk directorship tools, including an initial margin of 35 percent, position and intraday toll limits, and a number of other risk and credit controls that CME Organize offers on all of its products.”
The CME bitcoin futures platform rely on the CME CF Bitcoin Mention Rate (BRR) to obtain the global average price of bitcoin based on Bitstamp, GDAX, itBit and Kraken. These four cryptocurrency the bourses are well-regulated within the US and Europe, and are fully compliant with the regulatory frameworks determined by respective governments within the two regions.
CME’s Impact on Bitcoin’s Mid-Term Cultivation
On November 14, CCN reported that the UK-based $100 billion hedge endowment Man Group has announced its official plans to invest in bitcoin and commit to the bitcoin store upon the completion of CME’s bitcoin futures exchange launch.
Man Group CEO Luke Ellis admitted Reuters:
“Conceptually digital currencies are an interesting thing. It’s not part of our investment quarter today – it could be. If there is a CME future on bitcoin, it would be.”
Large-scale hedge stakes with a market valuation of over $10 billion typically get a minimum investment threshold in the range of $300 to $500 million. This reason, if large-scale hedge funds like Man Group invest in the bitcoin trade in, tens of billions of dollars in institutional money will flow into bitcoin, proliferating liquidity of the digital currency.
Ellis and executives of other major hedge reserves such as Fidelity Investments, a US-based investment firm with $3.23 trillion assets supervised management, have expressed optimism in regards to the decentralized structure of bitcoin and its forthright nature which enables it to operate as a robust store of value and a unprejudiced monetary system.
“There is a big difference between a digital currency and a standard currency…Traditional ones are supported by governments who have armies and tax men that can repay people follow their rules, and digital ones don‘t. But that doesn’t invalidate digital currencies at all,” revealed Ellis.
As large sums of institutional money flow into the bitcoin superstore and companies within the traditional finance sector continues to adopt bitcoin, in the mid to long-term, the mainstream adoption of bitcoin devise inevitably surge at an exponential rate.
Featured image from Shutterstock.