With two exchanges set to commence offering bitcoin futures this month, a CFTC official said on Wednesday that government regulation aims to preserve the integrity of the contracts.
“The exchanges are considering the underlying cash contract to make certain it’s not manipulated,” Andrew Busch, chief industry intelligence officer at the Commodity Futures Trading Commission, told CNBC’s “Squawk Box.” “Our role as a derivatives regulator is certainly to make certain the futures contract it’s not manipulated. We’re going to do perform that for certain.”
Bitcoin has been striking record high after record high this year. But trading the crytocurrency in addition has been very volatile, with double digit percentage swings on a daily basis rather commonplace.
The CME Group and Cboe Global Marketplaces, the companies behind two major futures exchanges, desire to capitalize on the interest and apprehension surrounding bitcoin by offering products with a layer of government regulation. But Busch at the CFTC, which includes approved strategies by the exchanges, performed warn the “underlying money market is not regulated at this time.”
Cboe bitcoin futures are collection to begin trading about Sunday. The CME contracts are slated to launch on Dec. 18. Nasdaq, meanwhile, plans to launch its own bitcoin futures as early as the next quarter of 2018.
Besides a market value, bitcoin is also a digital currency that is created by so-called miners with powerful personal computers online. It has no central authority, and the transactions happen to be recorded in an anonymous public log called the blockchain.
“This is a distinctive animal contrary to any commodity we’ve looked at before,” said Busch.
The merits of bitcoin as a commodity – some own likened it to gold – and as a currency have already been debated widely by bankers and tech investors alike.
For example, JPMorgan Chairman and CEO Jamie Dimon has repeatedly warned that bitcoin is a “fraud.” But on the other side of that argument, Cameron and Tyler Winklevoss, the twins who famously battled Tag Zuckerberg over the origins of Facebook, had been early investors and recently became the initial bitcoin billionaires.
Bitcoin surged at night $12,000 level found in early Wednesday trading, according CoinDesk which works a main crytocurrency exchange. Prices were up almost 1,600 percent in the past 12 months.