January futures are up nearly 19% for the first full week of trading.
U.S. bitcoin futures rebounded on Friday, a day after closing below $17,000, as their first full week of trading was drawing to a close.
That bounce was reflected in the spot price for the cryptocurrency as well, with bitcoin BTCUSD, +7.13% up 5% to $17,394.19, according to CoinDesk. Bitcoin has rebounded about 8% this week, from a drop on Sunday that took it all the way down to around $13,000.
Bitcoin futures expiring in January rose to $17,810, according to Cboe Global Markets Inc. Those futures closed down 1.5% on $16,800 on Thursday, after reaching a session high of $17,520.
On Monday, Cboe rival CME Group Inc. CME, will start bitcoin futures trading. Cboe started trading its contract on Sunday at a level of $15,000, which means January futures are up nearly 19% for the first full week of trading.
So far, trading volumes on the Cboe have been fairly low. That may continue for a while as the initial margin required to get exposure on both Cboe and CME is so big, it confines participation to institutional and high net-worth traders, said Chris Weston, chief market strategist, in emailed comments.
But under a “perfect scenario” and barring any big collapse in price, participation should pick up over time, he said. That’s as increased liquidity reduces the bid/ask spread on futures and increases appetite for bitcoin futures among those players who use implied volatility as a means of assessing potential portfolio risk.
“That said, that is the longer-term potential and what could be considered an almost perfect scenario for bitcoin futures,” said Weston. “We also need to recall that the futures market is still a derivative of what is currently an unregulated market, so much rides on the longer-term prospects of bitcoin.”