Listen, here’s the thing: Bitcoin is looking like it wants to explode higher again after trading in what counts as a “range” this week. Of course when you’re talking about Bitcoin “rangebound” means something completely different than it does with traditional assets. Specifically, the “range” this week was +/- about $2,000.
But jokes aside, it’s broken out on Saturday and is now sitting at an all-time high across exchanges above $19,200:
The most recent leg higher comes just ahead of the CME’s highly-anticipated launch of Bitcoin futures. We got a look at the Cboe version this week and generally speaking, things got off to a decent – albeit slow – start.
As noted on Friday evening, TD Ameritrade is set to allow trading in the Cboe variant starting on Monday. TD will not immediately offer access to the CME product – apparently, they’re going to wait and see what the liquidity picture looks like.
There are marked differences in the two contracts as you’re hopefully already aware. Ahead of Sunday’s CME launch, it’s worth reminding readers about the specs:
| Contract Unit | 5 bitcoin, as defined by the CME CF Bitcoin Reference Rate (BRR) |
| Minimum Price Fluctuation | Outright: $5.00 per bitcoin = $25.00 per contract
Calendar Spread: $1.00 per bitcoin = $5.00 per contract |
| Trading Hours | CME Globex and CME ClearPort: 5:00 p.m. — 4:00 p.m. CT Sunday — Friday |
| Product Code | Outright: BTC |
| Listing Cycle | Nearest 2 months in the March Quarterly cycle (Mar, Jun, Sep, Dec) plus the nearest 2 “serial” months not in the March Quarterly cycle. |
| Termination of Trading | Last Day of Trading is the last Friday of contract month.
Trading in expiring futures terminates at 4:00 p.m. London time on Last Day of Trading. |
| Position Limits | Spot Position Limits are set at 1,000 contracts. A position accountability level of 5,000 contracts will be applied to positions in single months outside the spot month and in all months combined. |
| Block Minimum | 5 contracts |
| Price Limits | Price limits for a given Business Day are made by reference to the most recent Bitcoin Futures settlement price, settled at 3:00 p.m. Central time each Business Day.
Special price fluctuation limits equal to 7% above and below prior settlement price and 13% above and below prior settlement price and a price limit of 20% above or below the previous settlement price. Trading will not be permitted outside the 20% above and below prior settlement price. |
| Settlement | Cash settled by reference to Final Settlement Price, equal to the CME CF Bitcoin Reference Rate (BRR) on Last Day of Trading. |
Meanwhile, the CFTC is out warning about the risks associated with dabbling in cryptocurrencies. And yes, that’s just as ironic as it sounds given that it was the CFTC which blessed these products just two weeks ago.
“Entering into futures contracts through leveraged accounts can amplify the risks of trading the product,” the commission writes, in a “customer advisory” issued Friday. Virtual currencies are “not currently backed nor supported by any government or central bank, their value is completely derived by market forces of supply and demand, and they are more volatile than traditional fiat currencies,” the memo continues.
You’d be forgiven for thinking those words were written by an entirely different agency than the one that approved the products earlier this month.
In any event, as you ponder yet another plunge into the great unknown due to kick off in just over 24 hours, here is the CFTC’s full advisory letter…
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