Whales hang onto their Bitcoins, no big shorts yet

In recent history, there hasn’t been any derivative which has gained more attention on the global platform as Bitcoin. Last night, we witnessed history being made as the world’s most popular cryptocurrency’s future started trading at 18.00 ET, putting bitcoin into the realm of mainstream investors and regulators. Bitcoin surged as much as 26% in its debut session on the CBOE Exchange.

However, the launch was not without problems as trading volatility caused circuit breakers to kick in and halt trading. The CBOE exchange faced two trading halts over this period; a 2-minute halt when the price surged by 10% at 20:31 ET and once again at 22:05 ET for five minutes when the price fluctuated by 20%, in accordance with the contract specifications. 

The trading halts, also known as the ‘circuit breakers’, are put in place to protect investors from significant losses and also give the market time to rekindle their thought process. In short, they are inherent suggestions of warning signs and their major aim is to reduce the panic. Having said that, circuit break also creates news flashes on the market and in many circumstances, it actually fuels more panic.

Given that the CBOE jumped in an unprecedented market, and its website exploded due to high volume, it was certainly a wise move to choose such a rigid and stringent circuit breaking strategy under which all involved parties are protected.