Bitcoin futures make firm debut

World
Europe

Futures in bitcoin, which has taken global financial markets by storm, surged past 17,000 US dollars on Monday on the Chicago-based CBOE Futures Exchange, the first day of trading.

The cryptocurrency has skyrocketed to a record high this year, making a gravity-defying 15-fold gain since the start of the year and attracting institutional interest. The surge has also led to fears of a bubble.

“Bitcoin’s price surge continues to look like another speculative mania,” said Shane Oliver, chief economist at AMP Capital in Sydney.

“Futures trading in bitcoin...will make it easier to trade which will only suck in more buyers,” Oliver said. “It’s impossible to know how high it will get and for how long, so shorting it would be very high risk.”

Bitcoin prices were up 5.1 percent at 15,473 US dollars on the Bitstamp exchange, having jumped more than 30 percent last week.

Some market participants believe the fallout across other financial assets from a potential bursting of the bubble would be limited as bitcoin’s market capitalization, around 240 billion US dollars, is much smaller than the value of gold outstanding.

Source(s): Reuters