Bitcoin: Open For Business
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Bitcoin futures started trading on their first regulated futures exchange, the Chicago Board of Options Exchange (CBOE), on Sunday night. Around 2,800 contracts changed hands in the first 12 hours. There were a couple of glitches but overall the trade was volatile but smooth. The brokerage houses were and probably still are afraid of the wild swings they see in Bitcoin.
In the early trading of the Bitcoin, there are many restrictions, no short selling and 50% margins. Many brokers are not allowing their clients to trade Bitcoin futures as they try and calculate their exposure. The restrictions by the exchanges and clearinghouses are creating even a bigger demand. Eventually this will all calm down, and the Bitcoin futures will trade like any other futures contract.
Although gold is higher this morning, we would expect to see more pressure on gold for a number of reasons -- the weekly breakdown below $1,265 and the pressure from the Bitcoin as investors have found in their minds the Bitcoin to be an alternative safe-haven play. Bitcoin could also be considered a financial revolution and to quote the Seinfeld show, it’s real and it’s spectacular for now.