The craze for cryptocurrencies entered a new chapter on Monday as bitcoin futures rocketed by one-fifth of their value at a hotly anticipated launch.
The most-traded contract on the Chicago-based CBOE Global Markets exchange XBTc1 opened at $15,460 in New York on Sunday evening, before leaping to a high of $18,700 - a gain of 21 per cent. They were last quoted at $18,100 a premium of more than$1,700 to the price on Gemini Exchange, reports Reuters.
The futures are cash-settled contracts based on the auction price of bitcoin in US dollars on the Gemini Exchange, which is owned and operated by virtual currency entrepreneurs Cameron and Tyler Winklevoss.
The cryptocurrency has boasted a gravity-defying 15-fold gain since the start of the year, attracting institutional interest and no small amount of question marks.
The acting governor of the Reserve Bank of New Zealand on Sunday said bitcoin appeared to be a “classic case” of a bubble.
“With a bubble you never know how far it is going to go before it comes around,” Grant Spencer told a local television programme.
Some market participants believe the fallout across other financial assets from a potential bursting of the bubble will be limited.
“Bitcoin’s market capitalization is currently around $240 billion, which is much smaller, say, than the value of gold outstanding,” said Andrew Kenningham, economist at Capital Economics.
“If the price of bitcoin fell to zero today, the paper losses would be equivalent to a 0.6 percent fall in US equity prices. As most investors have bought bitcoin at much lower prices, the relevant losses would arguably be smaller.”