Bitcoin [BTC] – The CBOE Exchange Discontinues its Bitcoin Futures Product Conceding Market to CME

cboe bitcoin futures

The Chicago Board Options Exchange (CBOE) is discontinuing the listing of its fiat-settled Bitcoin futures going forward citing a need to reassess its digital assets trading products.

In an announcement by the CBOE on Thursday, March 14th, it stated that

“the CFE [CBOE Futures Exchange] is not adding a Cboe Bitcoin (USD) (“XBT”) futures contract for trading in March 2019.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.”

Its currently running futures contracts will, however, be available for trading through their June expiry date.

cboeCboe launched its Bitcoin futures product together with the Chicago Mercantile Exchange (CME) back in December 2017 during the peak of the Bitcoin bull run. The fiat settled Bitcoin futures product allows investors to gain exposure to Bitcoin without the need to physically own the underlying digital asset.

The investors purchase contracts that track the price of Bitcoin and speculate on its future price at the date of the expiry of the contracts. Upon expiration, the difference between the speculated price and the actual price is settled by the losing party in fiat (USD).

Since the launch of the Bitcoin futures back in December 2017, the price of Bitcoin has corrected more than 80% in the longest running bear market in the history of Bitcoin.

Following the steep price decline, the CBOE futures have had a falling demand failing to surpass $1 Billion in notional trade volumes since May 2018.

For the better part of 2018 and in Q1 2019, the CBOE Bitcoin futures have consistently trailed CME’s Bitcoin futures by a huge margin. Recently, CME’s futures product posted t record 18,300 contracts traded in a single 24 hour period, an equivalent of ~91,690 BTC (roughly ~$360 million in value).

According to reports, the CME Bitcoin futures are experiencing the best quarter yet in Q1 2019 with February volumes alone running at a 40% Y/Y clip.