Bitcoin Price Breaches $7,000 to New High

Bitcoin prices breached $7,000 after the world’s largest futures and options exchange said it will launch bitcoin futures.

The cryptocurrency hit a new high of $7,351 on Tuesday, according to CoinDesk data. Just two days earlier, the last bitcoin exchanges shuttered in China following a regulatory crackdown on cryptocurrencies, while Chicago-based CME Group announced it will launch bitcoin futures before the end of the year.

As of early Friday, bitcoin has pared some earlier gains and stood at $7,245, according to CoinDesk data.

“Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract,” CME Group Chairman and CEO Terry Duffy said in a news release.

Bitcoin derivatives will attract more heavyweight players, which will help stabilize the price of this virtual commodity, said Wang Liren, senior research from China Blockchain Research Alliance, an association founded by members of the Global Sharing Finance 100 Forum. The effect will be reduced volatility and increased liquidity as well as easier convertibility with fiat currencies, he added.

CME Group still requires approval from the U.S. Commodity Futures Trading Commission before it can launch the bitcoin futures. In September 2015, the commission officially recognized bitcoin and other types of cryptocurrencies as commodities.

The commission had already given the go-ahead to cryptocurrency trading platform LedgerX in July to clear and settle derivatives contracts for bitcoin and other cryptocurrencies. The company traded more than $1 million in bitcoin derivatives during its first week of operations, according to a company statement. In August, the Chicago Board Options Exchange also said it will introduce bitcoin futures, without giving a definite date.

On Friday morning Beijing time, bitcoin’s market capitalization was $118 billion, or 60% of all cryptocurrencies, according to data provider CoinMarketCap.

Contact reporter Liu Xiao (liuxiao@caixin.com)