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Bitcoin is a digital currency (or cryptocurrency) and payment system, run by a decentralized peer-to-peer network of computers. Bitcoin was created in 2009 by a programmer or group of programmers under the pseudonym Satoshi Nakamoto.[1]

As of June 2019, the total value of all bitcoin tokens outstanding was estimated to be about $254 billion, according to

Bitcoin is essentially a software program that slowly releases new bitcoins to the network of computers (bitcoin "miners") running the software. The program is designed such that coins become more and more difficult to mine as time passes. The limit of 21 million bitcoins is expected to be reached around 2040. [2]

As the value of bitcoin surged in late 2013, it began to attract the attention of major media outlets as well as regulatory authorities. At issue was whether the use of bitcoin is tied to illegal activities such as movement of drugs and stolen goods, money laundering or tax evasion.[3] Due to the decentralized nature of bitcoin, it remains outside a central monetary authority. But the cryptocurrency became mainstream over the following years, as more institutional participants jumped into the market. Banks and other firms also took the underlying technology of bitcoin, also called blockchain, to build new systems for payments, transfers, new securities and so-called smart-contracts.

Holders of large amounts of bitcoin are often called "whales." As of December 2017, about 40 percent of bitcoin was held by around 1,000 users.[4]

Bitcoin Exchanges

Some of the more prominent bitcoin exchange entities are:[5]

  • Gemini (or Gemini Trust) - U.S. based
  • Coinbase
  • Bitstamp - International
  • GDAX
  • itBit - U.S. based
  • Kraken - International
  • Bitfinex

Bitcoin Derivatives

In 2016, the CME Group launched bitcoin price indexes for the first time, seeking to bring institutional-grade resources to the bitcoin trading markets.[6]

In December 2017, the Chicago Mercantile Exchange and the Cboe Futures Exchange (CFE) launched new contracts for bitcoin futures products. Cantor Exchange self-certified a new contract for bitcoin binary options.

LedgerX, a trading and clearing platform for digital assets, received approval for its platform from the CFTC in July of 2017 and began listing physically settled one- to six-month options contracts for bitcoin in October 2017. Other digital currency contracts such as Ethereum options are expected to follow.

The CFE launched trading in Cboe bitcoin futures on December 10, 2017 under the ticker symbol "XBT". The CME launched its own bitcoin futures contract a week later (Dec. 17) under the ticker "BTC." The Cboe settled its futures against a daily price auction from Gemini, while the CME uses its own bitcoin reference rate which tracks several cryptocurrency exchanges.[7]

On October 3, 2018, ErisX announced its formation as the successor to Eris Exchange, a designated contract market that listed interest rate swap futures products. The company said it planned to trade and clear cryptocurrency futures contracts at some point. The exchange also said that it would offer spot trading. According to ErisX, its investors include DRW Venture Capital, Valor Equity Partners, TD Ameritrade, Virtu Financial, NEX Opportunities, Cboe Global Markets, CTC Group Investments, Digital Currency Group, Nico Trading, Pantera Capital, Third Stone Partners, CMT Digital, Susquehanna International Group, XR Trading, C2 Capital Management and ED&F Man Capital Markets Inc.[8]

In March 2019, Cboe made a surprise decision to delist its bitcoin futures contract, with the final settlement of the contract on June 19, 2019. It had steadily lost marketshare to CME Group and open interest volume at CME was almost six times higher than Cboe's contract. CME posted record volumes in its bitcoin futures contract in 2019 and announced in September 2019 plans to launch bitcoin options in Q1 2020.[9][10]

ErisX announced on April 30, 2019, that it had closed another $20 million in funding from investors and was launching its spot market as well as related clearing services that day. Bitcoin was one of the initial cryptocurencies that could be traded with its new services, as well as Bitcoin Cash, Litecoin, and Ethereum traded against the U.S. dollar and against each other. In an interview with CoinDesk, Chief Strategy Officer Matt Trudeau said that ErisX continues to build out its technology, raise funds, and apply for futures and futures clearing licenses.[11]


For the first several years after its creation, bitcoin held limited appeal. In 2013, however, the value of the virtual currency exploded, with prices moving from $13 to over $1200.[12]

Mt. Gox, one of the world's first-ever bitcoin exchanges, ceased operations indefinitely on February 25, 2014 following a series of hacking attacks that caused its customers to lose millions of dollars worth of crypto. Mark Karpelès, the CEO of Mt. Gox, faced several lawsuits and criminal charges as a result.[13][14][15]

On March 25, 2014 the Internal Revenue Service announced that bitcoin should be viewed and taxed as property and not as currency. This means that employers who pay wages in bitcoins will have to report those wages like any other payment made with property, and that bitcoin income will be subject to federal income withholding and payroll taxes. The agency said “it does not have legal tender status in any jurisdiction."[16]

In May 2014 the U.S. Federal Election Commission voted to allow political committees to accept Bitcoin donations.[17]

In May of 2016, an Australian entrepreneur named Craig Wright publicly identified himself as the Bitcoin creator Satoshi Nakamoto and offered as proof that he had digitally signed messages using cryptographic keys created during the early days of bitcoin's development and linked to blocks of bitcoins known to have been mined by Nakamoto.[18] However, The Economist and others were skeptical.[19]

CME Group, in collaboration with Crypto Facilities Ltd., a digital assets trading platform, launched CME CF Bitcoin Reference Rate (BRR) and CME CF Bitcoin Real Time Index (BRTI) on November 14, 2016. BRR provides a final settlement price in U.S. dollars at 4 pm London time on each trading day, and RTI gives users real-time access to bitcoin prices.[20] [21]

In March of 2017 Bitcoin's price plunged briefly and then recovered after the SEC refused to grant an exemption that would have let the Winklevoss Bitcoin Trust ETF trade on the Bats BZX Exchange.

Bitcoin made the most significant change in its 9-year history in July of 2017 when it split into two currencies after a splinter group launched a newer version of the currency with a different configuration.[22] The two competing currencies are known as Bitcoin and Bitcoin Cash. The group behind Bitcoin Cash copied bitcoin’s software, added a couple of new features, and released it to the public. It will be an almost identical copy, and anybody who has a bitcoin balance can automatically hold the exact same amount of Bitcoin Cash. The main difference between the two is how fast they trade and how many trades can happen in a short amount of time.[23]

At the same time, CBOE announced plans to launch bitcoin future contracts using data from Gemini Trust, the virtual currency exchange run by the Winklevoss twins.[24] The bitcoin futures debuted at CBOE Dec. 10, rising from a price of $2,730 to $18,190 the morning of Dec. 11.[25] The price of bitcoin itself surged to around $16,800.[26]

In November 2017 it was reported that Nasdaq also plans to launch bitcoin futures in the first half of 2018. Separately, Cantor Exchange said it was seeking to launch bitcoin derivatives on its Cantor Futures Exchange LP, also in the first half of 2018.[27]

In 2018, U.S. Federal investigators discovered that bitcoin was the currency of choice for the Russian hackers charged with influencing the 2016 U.S. Presidential election. The hackers allegedly used bitcoin to launder approximately $95,000 to pay companies such as the Romanian company in their efforts. This was done in order to avoid direct relationships with financial institutions by utilizing the anonymity of bitcoin's transactions.[28]

John Lothian News Special Report, December 2013

On December 7, 2013, John Lothian News published a special report, "A Bitcoin for Your Thoughts" featuring:

  • a column from JLN publisher John Lothian about his thoughts on bitcoin,
  • a short primer on the aspects of bitcoin, by John Lothian News Chief Information Officer Jeff Bergstrom and
  • a selection of the best articles on bitcoin we found at the time of the report.

To view the report, click HERE.


  1. How does Bitcoin work?. The Economist.
  2. Bitcoin Survival Guide: Everything You Need to Know About the Future of Money. Wired.
  3. Bitcoin Tax Tips for Congress and Everyone Else. Forbes.
  4. The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market. Bloomberg Businessweek.
  5. Exchanges - Bitcoin.
  6. CME Group Launches Bitcoin Price Indexes. Traders Magazine.
  7. After Self certification Begins, Bitcoin Futures Set for CFTC Scrutiny. Traders Magazine.
  8. ErisX Announces New Exchange for Digital Asset Investors and Traders. ErisX press release via Businesswire.
  9. Ballyhooed Bitcoin Futures Contract Bows Out With a Whimper. Bloomberg.
  10. CME Group to Launch Bitcoin Options in Q1 2020. Press Release.
  11. ErisX Launches Crypto Spot Market on Heels of New $20 Million Raise. CoinDesk.
  12. Greenspan Says Bitcoin a Bubble Without Intrinsic Currency Value. Bloomberg.
  13. Mt. Gox bitcoin exchange news. Coindesk.
  14. Mt. Gox and the Surprising Redemption of Bitcoin’s Biggest Villain. Fortune.
  15. Court Approves U.S. Extradition for Alleged BTC-e Operator. Coindesk.
  16. IRS Says Bitcoin Should Be Considered Property, Not Currency. New York Times Dealbook.
  17. Election Commission Votes to Allow Bitcoin donations. The New York Times.
  18. Craig Write revealed as Bitcoin creator Satoshi Nakamoto. BBC News.
  19. Craig Wright’s claims to be Satoshi Nakamoto come under fire. The Economist.
  20. CME Group and Crypto Facilities Announce Launch of Bitcoin Reference Rate and Real-Time Index. CME Group.
  21. CME CF Bitcoin Reference Rate & CME CF Bitcoin Real Time Index. CME Group.
  22. CBOE to launch bitcoin future contracts. The Financial Times.
  23. Bitcoin Surges Past $4,000 on Speed Breakthrough. Bloomberg.
  24. CME to launch bitcoin futures in push for currency's wide adoption. Reuters.
  25. Bitcoin futures soar amid frenzy over virtual currency. Chicago Sun Times.
  26. Investors are dumping gold to buy bitcoin. Bitcoin Investor.
  27. Nasdaq Plans to Launch Bitcoin Futures in First Half 2018. The Wall Street Journal.
  28. Cryptocurrency Market Capitalizations.