Bitcoin Has a Future and You Can Go Long or Short: QuickTake Q&A

Trading in bitcoin futures began a week ago on Cboe Global Markets Inc. Its bigger rival, CME Group Inc., began offering a competing product on Dec. 17. The trading is a milestone in the acceptance of the digital currency by the world of mainstream investing, spurred in part by bitcoin’s meteoric rise this year. Skeptics still abound, however, including executives at some of the world’s largest banks. For the doubters, at least there’s this silver lining: Futures trading may add an opportunity to burst what they see as a bubble.

In the first week, more than 10,000 of Cboe’s contracts -- representing about $180 million of bitcoin -- were traded, according to data compiled by Bloomberg. There was initially a big difference between the price of Cboe’s product and the price of bitcoin, a sign the market wasn’t very efficient. The gap peaked at 13 percent. But by the end of the week it had shrunk to less than 3 percent. Bitcoin futures trading on CME -- a much bigger player than Cboe -- got off to a faster start and with more efficient pricing. About twice the value of the most active contract was traded in the first hour than on Cboe’s debut. And the futures traded only about 2 percent higher than bitcoin itself after the first two hours.