The cryptocurrency market witnessed a historic milestone on December 16, 2017, as Bitcoin surged to a new all-time high of $20,089, cementing what many analysts have called the most dramatic bull run in the asset’s nine-year history. The rally came just 48 hours before the Chicago Mercantile Exchange (CME) — the world’s largest futures exchange — was set to launch its highly anticipated Bitcoin futures contract.
TL;DR
- Bitcoin hit $20,089 on December 16, a new all-time high and a 1,600% gain year-to-date
- CME Group launched Bitcoin futures on December 18 under ticker “BTC,” with each contract representing five Bitcoins
- CBOE’s Bitcoin futures, which debuted December 10, gained 17.1% in their first week
- Bitcoin’s market capitalization surpassed $326 billion, larger than many publicly traded companies
- Institutional investors showed strong interest, with TD Ameritrade enabling futures trading for qualified clients
Bitcoin’s Relentless Climb to $20,000
After a week-long consolidation around the $17,000 level, Bitcoin broke out with explosive force on December 16, surging more than $2,000 in a single day to breach the psychologically significant $20,000 barrier. According to CoinMarketCap data, Bitcoin was trading at $19,497 with a staggering 24-hour volume of over $12.7 billion and a market capitalization exceeding $326 billion.
The rally capped off an extraordinary year for the flagship cryptocurrency. Starting January 2017 at approximately $1,000, Bitcoin’s price had multiplied nearly twentyfold — a 1,600% gain that dwarfed returns from virtually every traditional asset class. The surge was fueled by growing mainstream adoption, institutional interest, and the anticipation of regulated derivatives products.
CME Futures: A Game Changer for Institutional Adoption
The timing of Bitcoin’s latest surge was far from coincidental. The CME Group, the world’s largest futures exchange, was preparing to launch its Bitcoin futures contract on December 18 at 6:00 PM Eastern Time under the ticker symbol “BTC.” This launch came exactly one week after rival exchange CBOE Global Markets debuted its own Bitcoin futures on December 10.
The CME contract is notably larger than CBOE’s — each CME contract represents five Bitcoins rather than one, giving investors five times the exposure. With Bitcoin near $20,000, a single CME contract carried a notional value of approximately $100,000, with an initial margin requirement of 43%.
A key distinction between the two products lies in their pricing methodology. While CBOE’s futures are priced based on the Gemini exchange alone, CME’s Bitcoin Reference Rate (BRR) aggregates data from four major exchanges — Bitstamp, GDAX, itBit, and Kraken — providing what many analysts consider a more robust and representative price benchmark.
“The CME contract is based on a broader array of exchanges. So there is a possibility that the CME contract may generate more interest and more volume,” said Matt Osborne, chief investment officer of Altegris, in comments ahead of the launch.
CBOE’s Strong First Week Sets the Stage
The CBOE Bitcoin futures, traded under the ticker “XBT,” had already demonstrated strong demand during their first week. The most popular January-expiring contract gained 17.1%, settling at $18,105 on Friday, December 15. Trading was less volatile than many had feared, although CBOE’s website experienced temporary outages due to overwhelming traffic on launch day.
Approximately 20 firms participated in CBOE’s launch, including Interactive Brokers and Wedbush Futures. TD Ameritrade announced late Friday that it would allow certain qualified clients to begin trading CBOE Bitcoin futures starting December 18, though CME futures were not yet available on the platform.
“I think today people were anticipating a similar type of event [to CBOE’s launch],” said Joe Van Hecke, founder and managing partner at Chicago-based trading firm Grace Hall, who was among the first to trade both the CBOE and CME contracts. “The aggressiveness of the bids did take me by surprise.”
Market Dynamics and Trading Volume
Early data from CME’s launch day showed approximately 1,049 January contracts traded — equivalent to 5,245 Bitcoins — slightly exceeding CBOE’s roughly 3,860 single-Bitcoin contracts. The CME futures opened at $20,650 for the January contract before pulling back, while Bitcoin spot prices settled around $18,718 according to CoinDesk’s index.
Bobby Cho, head trader at Cumberland, a subsidiary of DRW and one of the largest Bitcoin trading companies, noted that CME futures were trading closer to the actual Bitcoin spot price than CBOE’s contract had at its debut. “There’s more people who are involved in the CME launch than there were at CBOE’s,” Cho said. “The spot market still dictates where futures are trading, just because of the sheer volume.”
Why This Matters
The launch of Bitcoin futures on CME represented a watershed moment for cryptocurrency markets. For the first time, the world’s largest and most established futures exchange was offering a regulated product tied to Bitcoin, opening the door for institutional investors — pension funds, hedge funds, and asset managers — to gain exposure to the cryptocurrency without holding the underlying asset.
The futures market also introduced the ability to short Bitcoin on a major regulated exchange, a development that many analysts believed would eventually increase price discovery efficiency and reduce the extreme volatility that had characterized Bitcoin’s parabolic rise. Whether the introduction of futures would cool the speculative fervor or fuel it further remained the subject of intense debate among market participants and regulators alike.
With Nasdaq and Cantor Fitzgerald also planning Bitcoin derivatives products, December 2017 marked the beginning of cryptocurrency’s integration into the mainstream financial system — a transformation that would have profound implications for years to come.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Cryptocurrency investments carry significant risk.
1600% YTD gains and people were calling for 50k by january. CME futures launched and it dumped 65% in 6 weeks. same pattern every time Wall Street arrives
CME launching BTC futures at the absolute top of the bubble is the most perfectly timed institutional arrival in financial history. you cant write this stuff
Ming X. CME launching at the exact top is the most perfect institutional timing in history. they got their shorting tool and the market crashed 80 percent
CBOE launched first and nobody cared. CME launched two days later at the exact top. institutions got their shorting tool and retail got destroyed
Ming X. CME launching at $20K was the loudest bell anyone could ring. institutions got their shorting tool and retail got rekt. same story every cycle
CBOE got there first on Dec 10 and did 17% in week one. everyone forgot CBOE existed within 2 years while CME became the dominant venue. first mover advantage means nothing
Anders B. TD enabling futures for retail clients was the real signal. institutional money was already queued up before CME even opened for trading
CBOE got there first on December 10 and gained 17% in week one. they literally shut down their Bitcoin futures in 2019 because nobody was trading them anymore
cboe_relic CBOE shut down BTC futures in 2019 because zero volume. they rushed to be first and nobody cared. CME won because institutional relationships not product
cboe_relic CBOE rushed to be first and shut down in 2019 with zero volume. CME won because they had institutional clients not because the product was better
TD Ameritrade enabling futures for retail clients at $20k BTC. wonder how many of those accounts are still active
1,600% YTD and people were still buying. the futures launch was supposed to bring legitimacy but it basically handed institutions a shorting tool
everyone celebrated $20k but the CME futures launch was the top signal. institutional money came to short, not to buy your bags
1600% YTD and people were calling for $50k by february. the 5 BTC contract size was designed for institutional sizing, retail had no business in those futures
1600% YTD and my uber driver was giving me BTC tips. the cme launch was the loudest sell signal in crypto history
1600 percent YTD and my taxi driver was giving BTC price predictions. CME futures launch was the loudest sell signal in crypto history
BTC going from $1K to $20K in 12 months and people thought $100K was imminent. the mania was palpable, everyone at my office was asking about bitcoin
5 BTC per contract. at $20K that was $100K notional per contract. retail was trading these on 10x leverage on top of that. recipe for disaster
futures_mem 10x leverage on $100K notional CME contracts. retail got absolutely slaughtered when BTC dropped 65 percent in the 6 weeks after launch
5 BTC per contract at 20k was 100k notional. retail was on 10x leverage on top of that. absolute massacre within a week
futures_mem_ 5 BTC per contract at 20k was 100k notional. retail on 10x leverage meant a 10 percent move liquidated everything. massacre within a week
leverage_calc_ 100K notional per contract on 10x leverage meant a 10% move wiped everything. the massacre within a week was mathematically guaranteed
1600% YTD and taxi drivers were giving price predictions. CME launch was the ultimate liquidity event for institutions to exit while retail bought the top at 20K
my coworker bought at 19.8k on december 16th and held all the way down to 3k. he still hasnt sold. thats either diamond hands or clinical insanity
5 BTC per contract at 20k was 100k notional. CME required 50% margin so you needed 50k cash to open one contract. this was never a retail product, it was a shorting tool for institutions