The Chicago Board Options Exchange (Cboe) has announced that it will drop new Bitcoin futures contracts each month. Perhaps the decision was required by low trading volumes. Cboe pointed out that its CFE futures platform is currently considering its position in cryptocurrency derivatives trading.
Also read: Canadian capital market regulators point to new cryptocurrency rules
Cboe looks at the future of Bitcoin futures
In a statement dated March 14, the Stock Exchange stated: "CFE will not add a futures contract for Cboe Bitcoin (USD) (" XBT ") to trading in March 2019. CFE examines its approach to further planned offer derivatives of digital assets for trading. CFE does not currently intend to list other XBT futures contracts for trading. "
Current Bitcoin futures contracts will be available for trading until June when they expire. The Cboe futures were greeted with great enthusiasm when they first hit the market in December 2017, when BTC prices reached their peak. Along with the Chicago Mercantile Exchange (CME) Bitcoin futures, which came into the market at roughly the same time, the instruments were seen as major steps in the mainstream that are critical to attracting institutional capital to the cryptocurrency market.
However, the events that followed in the following months did not give much confidence as XBT trading volumes came to a standstill in part due to the continued market downturn of 2018.
According to the research firm Tradeblock, XBT lost ground to Chicago Mercantile Exchange Bitcoin futures, which have outperformed XBT funds in recent months, despite the same approach. Overall, the trading volume of Bitcoin futures has fallen since reaching its peak in the summer of 2018.
"Since December 2017, both CME and Cboe have tracked the fictitious Bitcoin futures trading volume, and while both companies launched competing products, the CBOE lost significant market share to the CME in the same month over the course of 2018." explained Tradeblock.
The report further stated that while the trading volume of Bitcoin futures initially grew significantly each month after the launch, spot trading continued to decline over the same period.
"Given these divergent trends, total CME and CBOE futures trading reached nearly the full spot trading volume of five of the largest US-based digital currency exchanges. This has changed a bit lately as futures volume has decreased and spot volume has risen slightly, "Tradeblock added.
Now that Cboe drops the Bitcoin futures, it will be interesting to see how these trends change as the market prepares to bring several new Bitcoin futures platforms to market. Bakkt, Erisx and Coinflex plan to launch Bitcoin futures.
What do you think of Cboe's decision to discontinue Bitcoin futures? Let us know in the comments below.
Images courtesy of Shutterstock and Tradeblock.
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