Bitcoin futures faced their first test of how to handle volatility within hours of launching Sunday on the Cboe Futures Exchange.

About two hours after their 6 p.m. ET launch, the new futures had climbed 10 percent, triggering a two-minute trading halt. By 10:05 p.m., the bitcoin futures had soared 20 percent, triggering a five-minute trading halt. The halts followed the exchange’s rules, similar to the way that trading in stocks is halted after sharp price moves.

However, price limits may be more relevant for bitcoin, which is notoriously volatile. Many cryptocurrency proponents see the launch of bitcoin futures as a step toward legitimizing the digital currency in the eyes of big, institutional investors.

The halts are “not surprising based on the volatility of the underlying [asset]. The futures are behaving as expected and designed,” said Tom Lehrkinder, senior analyst at consulting firm Tabb Group.

Cboe launched the bitcoin futures under the “XBT” ticker symbol on Sunday following a rampant leap in the digital currency’s price this year.

Bitcoin rallied as the futures launched. The digital currency traded more than 9 percent higher above $16,400, according to CoinDesk’s Bitcoin Price Index. The index tracks prices from digital currency exchanges Bitstamp, Coinbase, itBit and Bitfinex.

The new futures contract, which expires in January, traded more than $2,000 higher at $18,490, up 19.6 percent as of 11:18 p.m., ET. The futures had briefly turned negative at about 6:55 p.m. New York time before bouncing back.

Interest was so great in the new product, it initially appeared to be overloading Cboe’s website. “Due to heavy traffic on our website, visitors to http://www.cboe.com may find that it is performing slower than usual and may at times be temporarily unavailable,” the exchange said in a statement. “All trading systems are operating normally.”

The launch lets institutional investors buy into the cryptocurrency space. Until now, bitcoin has been mostly owned and traded by a few entrepreneurs.

Despite the great attention on the launch of the first bitcoin futures on a well-established exchange, analysts pointed out that initial interest from traders was low — about 800 contracts had traded roughly two-and-a-half hours into the launch.

“There aren’t that many market participants,” said Bobby Cho, head trader at leading cryptocurrency bitcoin trading company Cumberland. “People are just going about trading very thoughtfully, very mindfully.”

Just over four hours after the futures launch, however, the number of contracts had risen above 1,500.

“It works. There’s buyers and sellers,” Tabb’s Lehrkinder said. He noted that some funds may not have access to trading cryptocurrencies yet, and it could take time for funds to use the futures to short, or bet against, bitcoin gains.

Andrew Keene, CEO of AlphaShark Trading, also said that the bid-to-ask price spread was “too wide” for him to trade the futures right away. “I can’t trade a product when the spread is $120. If those spreads tighten up, then it will be much easier” for people to trade.

Bitcoin has become immensely popular this year, sending its price through the roof. In 2017 alone, bitcoin has shot up more than 1,000 percent. In the past month, the cryptocurrency is up more than $8,000 to trade at $14,950.06 on the Coinbase exchange shortly before the beginning of futures trading Sunday. It briefly broke above $19,000 on that exchange Thursday, before retreating.

Bitcoin year to date

Source: CoinDesk

Cboe is basing the price of bitcoin futures using the Gemini Trust Company, an exchange co-founded by the Winklevoss twins. One futures contract will be worth one bitcoin at the Cboe.

Bitcoin is one of the most volatile assets in the world right now rising and falling more than 20 percent at times in the span of a day. On Thursday, for example, bitcoin hit a high of $19,340 before falling more than 20 percent from that level. Such volatile trading — along with cybersecurity concerns and an association with criminal activity — has raised skepticism from major Wall Street institutions.

But launching bitcoin futures at the Cboe — one of the largest exchanges in the world — gives the digital currency some legitimacy it in the eyes of institutional investors. Bitcoin will also get a second dose of legitimacy after the CME Group launches its own bitcoin futures a week later. One CME bitcoin futures contract will be worth five bitcoins.

“The introduction of derivatives provides the necessary market structure for institutions to allocate to crypto-currencies,” which are short-term and long-term positives, according to Tom Lee, founder and head of research at Fundstrat Global Advisors. He also notes derivatives are “the first step to enable the creation of ETFs and other more liquid instruments.”

— CNBC’s Evelyn Cheng contributed to this report.