Former CFTC Commissioner Offers Praise For Bitcoin Futures

On Friday, November 10, 2017, ex-CFTC Commissioner Bart Chilton shared his thoughts on bitcoin while appearing on “Mornings with Maria,” a Fox News segment hosted by Maria Bartiromo. Chilton assessed that bitcoin is sustainable, but he said, “I don’t know if it’s sustainable at these prices.”

On November 8, 2017, after news broke that Segwit2x had been called off, bitcoin temporarily traded at an all-time high of $7776.42, per CoinMarketCap. Since then, bitcoin has slimmed down to the mid-6000s, while the price of bitcoin cash has suddenly spiked.

Echoing the statements of former Federal Reserve Chairman Alan Greenspan, who appeared on the show on Thursday, Chilton assessed that the price of bitcoin is dependent upon its limited supply – not exactly groundbreaking economic analysis. More interestingly, Chilton disagreed with JP Morgan CEO Jamie Dimon, who notoriously called bitcoin a fraud. 

“People are actually using bitcoins to purchase things,”... “That’s not a scam or a fraud, but it’s certainly different than other currencies”

When commentator Kevin R. Kelly noted that the CME Group plans to offer bitcoin futures, Chilton praised the company, predicting that futures will “put some sideboards on [cryptocurrency].” Chilton professed that CME’s bitcoin futures will not be susceptible to flash crashes because the product will include “circuit breakers, they call them Stop Logic at CME.” Of course, he was referencing CME’s plan to institute soft limits (two-minute trading halts) at 7 percent and 13 percent fluctuations and a one-day hard limit of 20 percent. Chilton also emphasized the importance of counterparty risk.

Although CME has not yet begun trading, bitcoin futures are already available in the US, at least for institutional investors and high net worth individuals. In mid-October 2017, LedgerX, a cryptocurrency derivatives trading platform, went live to offer day-ahead swaps and monthly put and call options for BTC/USD.