The Chicago Mercantile Exchange (CME), one of the only groups that can offer Bitcoin futures (like Bakkt), is planning to double its trading limits from 5,000 Bitcoin to 10,000, according to a document released by the company.
As of now, each contract is worth around 5 Bitcoin and investors can buy up to 1,000 of them a month. This change will see them buying up to 2,000 a month, hence the doubled amount.
This is a unique offering that not many other platforms have, which would help the CME stand out from the pack.
The CME’s letter is addressed directly to the United States Commodity Futures Trading Commission (CFTC), who needs to approve of the raise.
“Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) hereby notifies the Commodity Futures Trading Commission (“CFTC” or “Commission”) that it is self-certifying an increase of the spot month position limits for the Bitcoin Futures contract (the “Contract”), commencing with the October 2019 contract month and beyond,” reads the letter.
That said, the CFTC believes limits are important when it comes to cryptocurrency trading, especially when investors are buying Bitcoin, for example. The asset is incredibly volatile and not something that investors should just be able to throw all of their money into.
So, the CFTC will likely take some time to consider the proposal before it would go into effect this September 30th for traders in October.
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