Bitcoin Futures Surge Past $17,000 on Launch Day

A collection of Bitcoin (virtual currency) tokens are displayed in this picture illustration taken Dec. 8, 2017. (Reuters/Benoit Tessier/Illustration)

SYDNEY–Futures in bitcoin, which has taken global financial markets by storm, swung above their launch price, while the dollar kept gains in Monday’s Asian session on expectations the Federal Reserve will stick to its tightening path.

The front-month bitcoin futures contract on the Chicago-based CBOE Futures Exchange surged past $17,000 on Monday, the first day of trading.

The January contract opened at $15,460 in New York on Sunday evening, before leaping to a high of $17,170 during Asian hours. They were last quoted at $17,120, a more than $1,000 premium to the price on Gemini Exchange.

The futures are cash-settled contracts based on the auction price of bitcoin in U.S. dollars on the Gemini Exchange, which is owned and operated by virtual currency entrepreneurs Cameron and Tyler Winklevoss.

The cryptocurrency has skyrocketed to a record high this year, making a gravity-defying 15-fold gain since the start of the year and attracting institutional interest. The surge has also led to fears of a bubble.

“Bitcoin’s price surge continues to look like another speculative mania,” said Shane Oliver, chief economist at AMP Capital in Sydney.

“Futures trading in bitcoin...will make it easier to trade which will only suck in more buyers,“ Oliver said. ”It’s impossible to know how high it will get and for how long, so shorting it would be very high risk.”

Bitcoin prices were up 5.1 percent at $15,473 on the Bitstamp exchange, having jumped more than 30 percent last week.

By Swati Pandey