BTC-0.38%
Crypto
Cboe Drops Bitcoin Futures Contracts, Continues to Assess its Approach to Digital Assets
Editorial disclosureRead more
All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.com. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.
In a statement released last week, the Chicago Board of Options Exchange (Cboe) has announced that it will stop listing bitcoin futures contracts in March 2019. At one time a pioneer of bitcoin futures, the crashing prices of bitcoin are likely a leading factor in Cboe’s latest move.
Cboe Stopping Bitcoin Futures Explained
In December of 2017, Cboe Global Markets was the first enterprise to offer bitcoin futures contracts. At the time, bitcoin was trading around $17,000, and soon after, climbed to almost $20,000.
Since then, prices have tumbled, trading at a price just below $4,000 at the time of this writing. In the midst of the ongoing price decline— frequently referred to as crypto’s bear market— Cboe has decided to discontinue offering bitcoin futures contracts.
Active bitcoin contracts will continue to be available for trade, though of the remaining, the last will expire in June.
Importantly, Cboe has yet to eliminate the possibility of other cryptocurrency derivatives. According to a release from the Cboe Futures Exchange (CFE), they are continuing to assess their digital asset approach for the future:
“CFE is assessing its approach with respect to how it plans to continue to offer digital asset derivatives for trading. While it considers its next steps, CFE does not currently intend to list additional XBT futures contracts for trading. Currently listed XBT futures contracts remain available for trading.”
An Overview of the Different Bitcoin Futures Contracts Explained
When bitcoin futures contracts first reached the market, many forecasted increased institutional investor interest in digital assets, similar to security token forecasts. The contracts provide a way in which investors can compliantly buy, sell, and become familiar with digital assets— all in a regulated marketplace.
Others followed in Cboe’s footsteps, bringing different variants of bitcoin futures available.
One of those was CME-group, a Chicago-based rival of Cboe.
CME offers cash-settled (USD) bitcoin contracts, which have historically witnessed much more trading volume than Cboe’s futures. In fact, the 30-day average volume is over four times higher than Cboe’s.
There have been no changes announced to such services offered by CME.
Other enterprises who either offer futures or plan to soon, include Nasdaq, Bakkt, and potentially Goldman Sachs.
What do you think of Cboe’s decision to halt bitcoin futures contracts? Will CME and others follow suit? Let us know what you think in the comments section below.
Image courtesy of Cboe.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
