Cboe Global Markets is leaping ahead of CME in an effort to become the first to launch bitcoin futures.

Cboe announced Monday it is launching futures trading in the cryptocurrency beginning Sunday, making the Chicago-based exchange the first to give investors a new way to wager on, and against, the booming new market.

"Given the unprecedented interest in bitcoin, it's vital we provide clients the trading tools to help them express their views and hedge their exposure," Ed Tilly, chairman and CEO of Cboe Global Markets, said in a release.

The Cboe Futures Exchange plans to offer trading in bitcoin futures beginning 6 p.m. ET Sunday. Trading will be free through December, according to the release.

In a race by major exchanges to offer bitcoin derivatives products, CME announced Friday it would launch bitcoin futures Dec. 18.

The Commodity Futures Trading Commission said Friday it would allow the CME and Cboe to launch bitcoin contracts. Cantor Exchange also self-certified a new contract for bitcoin binary options, the commission said.

Cboe's bitcoin futures will trade under the ticker symbol "XBT" and will be cash-settled against the auction price from Gemini Trust, the digital currency exchange founded by twins Cameron and Tyler Winklevoss.

In contrast, the CME bitcoin futures contract will be cash-settled against an index that's currently weighted to four bitcoin exchanges: Bitstamp, GDAX, itBit and Kraken.

The launch of bitcoin futures by prominent exchanges is a significant step toward the legitimization of the digital currency that was once the focus of a handful of tech entrepreneurs and often associated with illegal activity in online marketplaces.

Bitcoin futures will allow institutional investors to buy into the digital currency trend, and likely pave the way for a bitcoin exchange-traded fund in the U.S., analysts say. The digital currency is prone to sharp gains and losses of several hundred dollars in only a few hours, and enthusiasts say bitcoin futures will help investors feel more comfortable with buying bitcoin since they can use futures to protect against major losses.

"The prospective introduction of bitcoin futures has the potential to elevate cryptocurrencies to an emerging asset class," Nikolaos Panigirtzoglou, a global markets strategist at JPMorgan, said Friday.

Bitcoin has surged more than 1,000 percent this year to above $11,000, helped by increased interest from institutional investors. Twenty-four hour trading volume in bitcoin was $6.6 billion, according to CoinMarketCap.