Why Did CBOE Halt Bitcoin Futures Listing?

Wilfred Michael 

Wilfred Michael

News reporter

15 March 2019,
10:13
Why Did CBOE Halt Bitcoin Futures Listing?

In a rare development, the Chicago Board Options Exchange (CBOE) said in its March update that it would not list new markets for its Bitcoin Futures contract [Cboe Bitcoin (USD) (“XBT”)].

As per the announcement, the reason for the exclusion is that the exchange “is assessing its approach with respect to how it plans to continue to offer digital asset derivatives for trading.” For the time being, though, traders can still buy existing contracts which run between now and June 2019.

For some, given that transaction volumes on CBOE Bitcoin Futures market cross the $300 million mark monthly, it is easy to get worried about whether the top options exchange will list new bitcoin contracts in the future or whether this is the end of the road.

Well, since the announcement did not rule out any chance of the exchange listing new Bitcoin Futures contracts in the future, we believe that CBOE will make a come back sooner rather than later.

Current statistics reveal that although the CBOE Bitcoin Futures market launched nearly the same time with a similar offering by rivals, CME Group, the latter’s trading volume has soared. For instance, while Bitcoin futures transaction volume on CME Group's surpassed the $1.4 billion mark while CBOE struggled to stay above $300 million.

On this basis, it would not be wrong to conclude that CBOE’s statement about “assessing its approach” means that they are looking to beef up their offering to meet the need of crypto traders investing in the Bitcoin Futures market.

Also, the impending launch of the CoinFLEX and Bakkt Bitcoin Futures market that promises to settle trades in Bitcoin instead of fiat like (CME Group and CBOE) means the landscape is changing.

Whatever conclusion CBOE reaches at the end of the “assessmentperiod” will either result in new listings of Bitcoin Futures contract on the exchange or an early bowing out for the exchange after being the first to do so.

The ongoing effort by Bitwise Asset Management to list a Bitcoin ETF on CBOE  also suggests the exchange is not done with cryptocurrency and will add new contracts rather than leave the game. If they choose to pursue the braver course, then it will mean more competitive offers for traders leveraging the futures market and in turn, bring more liquidity and investment into the crypto industry.

 

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