The Commodity Futures Trading Commission (CFTC) said Wednesday (Dec. 6) that it is aiming to ensure that the integrity of the bitcoin futures contracts is preserved when CME Group and Cboe launch their futures contracts.
According to a report in CNBC, Andrew Busch, chief market intelligence officer at the CFTC, told CNBC's "Squawk Box” that the exchanges are looking at the cash contracts underlying the bitcoin futures to ensure they aren’t manipulated. "Our role as a derivatives regulator is to make sure the futures contract is not manipulated. We're going to do that for sure," he said in the interview.
Last month, CME Group and Cboe Global Markets announced they would be launching bitcoin futures, with CME’s product going live Dec. 18 and Cboe’s starting trading on Sunday. Meanwhile, NASDAQ is gearing up to launch its own bitcoin futures in the second quarter of next year, noted the report.
Bitcoin has been volatile all year, with wild price swings becoming common. Bitcoin started the year trading at around $1,000 and recently surpassed $12,000. Because it is unregulated, governments around the globe have been warning about the risks associated with investing and trading in bitcoin and other cryptocurrencies. "This is a unique animal unlike any commodity we've looked at before," said Busch.
Earlier on Wednesday (Dec. 6), another big rally from bitcoin put the value of the cryptocurrency above $12,000 – a record high, even in a backdrop of investors and experts wondering if bitcoin can possibly live up to these values, or if the bubble is just getting dangerously large at this point.
Bitcoin jumped Friday (Dec. 1) after an announcement via the main U.S. derivatives regulator that it would allow CME and CBOE to list bitcoin futures contracts. That is good news for bitcoin, as it indicates additional mainstream acceptance, and also because the futures contracts will make it easier to trade the new asset class. However, it will also mean that bitcoin will be facing more government regulation, and that it will now be open to something it has never had to deal with before: short investors.