Bitcoin futures opened at $15,000 (Rs 9,65,475) per unit at the Chicago Board Options Exchange on Sunday evening before surging to a high of $18,700 (Rs 12,03,812), Reuters reported. A futures contract is a financial product that allows investors to bet on whether the currency’s price will rise or fall.
The debut of the cryptocurrency’s futures was the first opportunity for professional investors to invest in it. The Chicago exchange will not trade in actual bitcoins but will instead track the price of the virtual currency on Gemini, a bitcoin exchange owned and operated by entrepreneurs Cameron and Tyler Winklevoss.
The greater mainstream acceptance of bitcoin, however, also open it up to shorting, a practice that allows investors to bet that its price will go down, The Guardian reported.
Bitcoin has gained 15-fold since the start of 2017 and has since attracted interest from investors. Many are, however, dismissive of the digital currency as no central bank is backing it and it also does not have a legal exchange rate.
The acting governor of the New Zealand’s central bank, Grant Spencer, on Sunday said the cryptocurrency was a “classic case” of a bubble, Reuters reported. “With a bubble you never know how far it is going to go before it comes around,” he said.
“This is a toxic concept for investors,” Stephen Roach, Yale University senior fellow and one of Wall Street’s most influential economists, told CNBC last week.
United States financial market company CME Group will launch its bitcoin futures product on December 18.