(Bloomberg) -- The spot price of bitcoin pared losses after futures began trading in Chicago, ushering in a new era for the cryptocurrency.
Bitcoin had fallen over the weekend after ending last week at $15,644, 43 percent higher over the five days. A month ago, it was less than $8,000.
Cboe Global Markets Inc., one of the world’s biggest regulated exchanges, began offering futures contracts at 6 p.m. in New York, capping a wild year for the digital currency that has captured imaginations and investment around the world, propelled by a 15-fold gain.
The futures contracts may open the door to greater inflows of institutional money, while also making it easier to bet on bitcoin’s decline. The entrance of regulated exchanges enables professional investors who have been unwilling to do business on the unregulated platforms where bitcoin currently trades to place bets on bitcoin’s price.
They’ll be watching for the wild swings that have become a hallmark of bitcoin trading in recent months, with four moves of at least 10 percent in the past two weeks alone. Such volatility could trigger trading limits in the futures, though many investors speculate the contracts will improve price discovery.
Bitcoin’s volatility was on full display Thursday. On Coinbase Inc.’s GDAX exchange, prices zoomed up to almost $20,000 from $16,000 in only about 90 minutes -- then crashed back down. Coinbase temporarily crashed and continued to suffer from service delays as prices fell. One of the largest U.S. online exchanges used by investors, Coinbase had prices $3,000 higher than on other exchanges at the height of the turmoil.