CME Group to Offer Options on Bitcoin Futures in Q1 2020

CME Group to Offer Options on Bitcoin Futures in Q1 2020

“These new products are designed to help institutions and professional traders to manage spot market Bitcoin exposure, as well as hedge Bitcoin futures positions in a regulated exchange environment,” CME Group’s Global Head of Equity Index and Alternative Investment Products Tim McCourt said, per the announcement.

In June 2019, a liquidity report published by CME Group revealed that it had set new records in both open interest and average daily trading volume the month prior. At the time, bitcoin futures hit 13,600 contracts in average daily volumes, worth about $515 million in notional traded value. This marked an increase of about 250 percent over the same period in 2018. Open interests (or contracts left unsettled) climbed up to 4,602; about 80 percent higher than in May 2018.

Things could get interesting for CME Group, as Intercontinental Exchange’s Bakkt gears up to launch its physically settled bitcoin futures on September 23, 2019. Bakkt’s qualified custodian, Bakkt Warehouse, also opened its doors for bitcoin deposits and withdrawals in September 2019. Though Bakkt’s futures offering was delayed beyond expectation over the firm’s difficulty in satisfying the requirements of U.S. regulators, particularly the Commodity Futures Trading Commission (CFTC), which tested the platform back in July 2019. 

But now, the stars seem aligned for the launch of Bakkt’s physical bitcoin futures. The chief difference between Bakkt’s options and that of CME’s lies with the settlement. The CME Group is providing cash settlements, while Bakkt’s contracts would be settled in bitcoin.

The post CME Group to Offer Options on Bitcoin Futures in Q1 2020 appeared first on Bitcoin Magazine.

 

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