Multiple Exchanges Racing toward the Bitcoin Futures Finish Line
They’re all in: The Chicago Mercantile Exchange Inc (CME), Cboe Futures Exchange (CFE), the NASDAQ and Cantor Exchange (Cantor) are moving forward with their respective Bitcoin derivatives.
Racing to cross the finish line as the first to bring Bitcoin into the Wall Street fold is Cboe, which has announced it will begin trading Bitcoin futures at 5:00 p.m. CT on Sunday, December 10, 2017.
Conventional wisdom suggestions that Bitcoin’s upswing will increase with more trust as a veritable asset class. Regarding the short term, Bitcoin’s current price may have already factored in the news of futures trading, which was first announced on October 31, 2017 by CME Group.
Naysayers such as Thomas Peterffy, CEO of the brokerage giant Interactive Brokers, suggest that Bitcoin derivatives could trigger a Lehman Brothers-style collapse of the cryptocurrency market.
According to today’s Cboe press release:
Cboe’s bitcoin futures will trade on CFE under the ticker symbol ‘XBT.’ XBTSM futures are cash-settled contracts based on Gemini’s auction price for bitcoin, denominated in U.S. dollars. Gemini Trust Company, LLC (Gemini) is a digital asset exchange and custodian that allows customers to buy, sell, and store digital assets such as bitcoin. XBT futures are specifically designed to allow participants to implement straightforward trading strategies, through settlement to a single, tradeable auction price.
Ed Tilly, Chairman and Chief Executive Officer of Cboe Global Markets, said: “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. We are committed to encouraging fairness and liquidity in the bitcoin market. To promote this, we will initially offer XBT futures trading for free.”
Tyler Winklevoss, Chief Executive Officer of Gemini, said: “Developing a regulated derivatives market is the next logical and crucial step towards advancing the broader digital asset market. We have been working for years to build infrastructure to grow the digital asset market and today’s news marks a significant milestone.”
On Friday, December 1, Cboe announced that CFE had filed a product certification with the Commodity Futures Trading Commission (CFTC) to offer bitcoin futures trading2. More information on XBT futures is available at www.cboe.com/xbt.
Over the last five years, the total value of all bitcoin outstanding (i.e., “market capitalization”) has grown from less than $1 billion to over $183 billion3 with daily notional turnover over $10 billion. The total value of all cryptocurrency tokens outstanding is now approximately $332 billion.
About Cboe Global Markets, Inc.
Cboe Global Markets, Inc. (Cboe: CBOE | Nasdaq: CBOE) is one of the world’s largest exchange holding companies, offering cutting-edge trading and investment solutions to investors around the world. The company is committed to relentless innovation, connecting global markets with world-class technology, and providing seamless solutions that enhance the customer experience.
Cboe offers trading across a diverse range of products in multiple asset classes and geographies, including options, futures, U.S. and European equities, exchange-traded products (ETPs), global FX and multi-asset volatility products based on the Cboe Volatility Index (VIX Index), the world’s barometer for equity market volatility.
Cboe’s trading venues include the largest options exchange in the U.S. and the largest stock exchange by value traded in Europe. In addition, the company is the second-largest stock exchange operator in the U.S. and a leading market globally for ETP trading.
The company is headquartered in Chicago with offices in Kansas City, New York, London, San Francisco, Singapore, Hong Kong and Quito, Ecuador. For more information, visit www.cboe.com.
About Gemini Trust Company, LLC
Gemini Trust Company, LLC (Gemini) is a digital asset exchange and custodian that allows customers to buy, sell, and store digital assets such as bitcoin and ether. Gemini is a New York trust company that is subject to fiduciary obligations, capital reserve requirements, and banking compliance standards of the New York State Department of Financial Services. Gemini was founded in 2014, by brothers Cameron and Tyler Winklevoss, to build a bridge to the future of money. For more information, visit Gemini.com.