The world’s largest derivatives exchange,CME Group, unveils its plans to launch Bitcoin futures during the fourth quarter of 2017.
The announcement states that the futures will be cash-settled based on the CME CF Bitcoin Reference Rate, a Bitcoin price index it launched last year in partnership with U.K. firm Crypto Facilities.
Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract. As the world’s largest regulated FX marketplace, CME Group is the natural home for this new vehicle that will provide investors with transparency, price discovery and risk transfer capabilities.
CME Group chairman and chief executive officer
Assuming regulators grant CME’s application, the exchange will become the second U.S. regulated exchange to offer Bitcoin derivatives to institutional traders.
Many Wall Street investors have been kept on the sidelines due to the absence of Bitcoin derivatives. The introduction of futures and options contracts is expected to introduce a “wall of liquidity” to the crypto markets.
On top of that, the launch of Bitcoin derivatives means the launch of the first exchange-traded fund (ETF) that tracks the price of bitcoin futures.
Once a derivative is launched, a bitcoin ETF will follow. That’s the common wisdom.
The announcement has already received a great feedback from the community. Charlie Lee, Litecoin creator, called the upcoming launch the "amazing news".