Within moments of launching Bitcoin futures, the CBOE (Chicago Houtvezelplaat Options Exchange) webstek crashed Sunday, raising fears of inadequate prep to meet the massive influx of traffic. The crash also raised concerns of a possible DDoS (Distributed Denial of Service) attacks ter the future. While the CBOE officials were sorting out the punt, Bitcoin conveniently traded above the $15,000 level te the crypto currency exchanges.
Most of the popular crypto currency exchanges faced slow down or crashed this year due to unexpected rise ter traffic. The market wasgoed sincerely hoping that things will get sorted out when the Wall Street gets involved, spil they are known to use servers which can treat millions of transactions te milliseconds. Ter fact, many speculators believed that they will deep-throat away traditional exchanges. However, it wasgoed not the case when Bitcoin futures were introduced ter the US’ CBOE exchange.
The Bitcoin futures were launched te CBOE exchange on Sunday, Five PM Central time. However, the unexpected influx of traffic caused the servers to slow down and display 404 errors. Even before the listing took place, market watchers were worried that Bitcoin price may be manipulated by unregulated exchanges.
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To limit risk, CBOE employed several measures, including a two minute and five minute trading halt te the event the price swings by more than 10% and 20%, respectively. The margin requirements were also raised from 33% to 44%, a figure higher than that of commodities such spil crude oil, natural gas, and gold. Spil liquidity wasgoed expected to be low ter the initial stages, the minimal maintenance margin wasgoed also enhanced from 30% to 40%.
Despite thesis precautions, financial market experts were worried about the possible manipulation of Bitcoin’s price. The Futures Industry Association (FIA) issued the following statement:
“We remain apprehensive with the lack of transparency and regulation of the underlying reference products on which thesis futures contracts are based and whether exchanges have the decent oversight to ensure the reference products are not susceptible to manipulation, fraud, and operational risk.”
Likewise, the CFTC (Commodity Futures Trading Commission) cautioned traders telling
“Bitcoin is a commodity unlike any the commission has dealt with te the past. Wij expect that the futures exchanges, through information sharing agreements, will be monitoring the trading activity on the relevant contant platform”.
Yesterday, the Bitcoin derivative contract expiring ter January switched mitts at $Eighteen,740, which is a premium of more than $Two,000 compared to the spot market. Almost Two,700 contracts were traded, with the lowest traded price being $15,000. The specie settlement at expiry will be based on the closing price provided by Gemini Exchange, the 22nd largest exchange by volume traded (according to CoinMarketCap.com).
Gemini Exchange is possessed by the twins Cameron and Tyler Winklevoss. To make Bitcoin futures a success, CBOE is suggesting commission free trading for one month. For the very first time ter decades, the futures industry is attempting to manage risk that may arise from a very volatile and unregulated asset.