After a week in which altcoins clocked up double-digit gains for a spectacular rally, the original cryptocurrency is back with a new record high. At 14:25 UTC the price of a single bitcoin was $18,393.94, up 4.5% in the last 24 hours. It crossed the $18,000 mark at 12:00 UTC. It first touched $17,000 on December 11th before reverting back to $16,000 price levels briefly. (See also: Bitcoin Price Weekly Review: Altcoins Rally).
Other cryptocurrencies followed bitcoin’s lead. Cardano, a cryptocurrency and smart platform for financial contracts, clocked the highest gains, increasing by more than 25% to $0.27. Ripple, which surged by more than 250% in the last week, is down by approximately 1%, as of this writing. The overall market capitalization of cryptocurrencies was $555.2 billion, up from $537 billion at 15:33 UTC yesterday.
The latest increase in bitcoin’s prices occurred after news broke that TD Ameritrade, the country’s largest online futures brokerage, is set to allow futures trading in the cryptocurrency, starting Monday, December 18. According to a Bloomberg report, the brokerage house plans to offer access to CBOE futures contracts, which began trading last Sunday, to clients.
The contracts will be available to customers who have $25,000 in their accounts and post margins that are 1.5 times more than those required by CBOE. (See also: Bitcoin Futures: CME Vs. CBOE: What's The Difference?)
CBOE requires 44% of the trading amount as margin. The Chicago Mercantile Exchange (CME) is set to begin futures trading in bitcoin on December 18th. Both developments are expected to boost liquidity in bitcoin markets and bring price stability to the volatile digital currency. (See also: CME To Launch Bitcoin Futures.)
Delivering Bitcoins For Futures Contracts
In the meanwhile, CFTC published a statement detailing how “actual delivery” of bitcoins will take place. This is important because, unlike gold or silver, bitcoin is a digital currency with no known physical counterpart. While it is being regulated as a commodity, futures trading for the entity becomes problematic because delivery of a physical asset does not occur upon settlement of the physical contract. That is why CBOE and CME have opted for cash-settled contracts for bitcoin futures. Yesterday’s announcement could set the stage for settlement of bitcoin futures in a digital format.
According to the agency, “actual delivery” of bitcoins is established by two factors. First, the customer should be able to take possession of the bitcoins, no later than 28 days from date of transaction. Second, the seller should have no control over the said bitcoins 28 days from the date of transaction.