Bitcoin futures are up and running, but trading volumes are on the light side.
Cboe CEO Ed Tilly is saying the start of bitcoin futures has been a success. "Our regulated market experienced a smooth operational open and orderly markets throughout the evening trading session. We look forward to the growth of this new derivatives market."
There were two trading halts, but they were part of the product design and were not unexpected. The Cboe website briefly experienced difficulties as so many tried to access the site when trading started at 6 p.m. ET on Sunday, but it quickly came back up.
Others also felt that while the volume was small, the interest level was sufficient to be considered a success. JB Mackenzie, managing director of futures and forex for TD Ameritrade, told me, "The first trade session was very orderly with good liquidity and volume. More than 2,000 contracts traded before midnight which shows that the marketplace was engaged."
Still, the roughly 3,000 contracts that have traded since the start of trading represents a notional value of only $50 million, tiny compared with established futures markets like gold, which can trade 400,000 contracts a day at a price of roughly $125,000 per contract.
"Trading was orderly, though there is not a lot of liquidity," Bobby Cho, head trader at bitcoin trading company Cumberland told me. "There is very limited access because a lot of the brokers aren't giving access to their clients yet."
Brian Kelly from Brian Kelly Capital also said the start, while small, could be considered a success: "I would expect more volume as people prepare for CME futures." That is a reference to bitcoin futures set to begin trading this coming weekend at the CME.
Though bitcoin has attracted tremendous interest, the bitcoin market is still remarkably small compared with other major asset classes.
Bitcoin versus other assets
Bitcoin: $300 billion
Gold: $6 trillion
U.S. stock market: $25 trillion
U.S. bond market: $38 trillion
Some investors are convinced bitcoin could join the big leagues of major asset classes. Cameron Winklevoss, an investor in the Gemini exchange that is behind the Cboe futures contract, told CNBC over the weekend, "Long term, directionally, it is a multitrillion-dollar asset — I don't know how long it takes to get there."