The bitcoin price has jumped 7% to US$16,341 on Thursday afternoon AEST after the Chicago Options Exchange (Cboe) also started to offer cash settled bitcoin futures for traders.
The futures market means speculators can now bet on the price of bitcoin being higher or lower at fixed dates into the future and hedge any long positions, or just bet on the price falling.
According to the Cboe its exchange may list contracts for expiry over periods a week out, a month out, or three months out, with the exchange initially listing contracts with an expiration of "three near term serial months".
In other words futures are currently being traded for settlement on 17 January 2018, 14 February 2018, and 14 March 2018, with the nascent futures market currently pricing in a slight rise in the bitcoin price over the next 3 months.
Speculators can currently buy a cash settled derivative contract to buy or sell exposure to the digital currency at US$17,690, US$18,940, or US$18,880 over the three separate monthly periods ahead.
Consensus suggests the price is heading higher over the short-term then, although if a bitcoin price crash does occur anyone selling the contracts could make some eye-watering profits.
Interest in the trading of bitcoin futures was reportedly so strong that the exchange's website crashed at the start of trade due to the amount of traffic being directed towards it. However, you can count me out as a bitcoin buyer given its lack of cash flows and opaque nature.
