CBOE Plans to Discontinue Its Bitcoin Futures Contracts From March 2019

19. Mar 2019 Posted by Akolkar B on News

Chicago Board Options Exchange (CBOE) has announced the pull-back of its Bitcoin futures contracts from the market. The U.S.-based derivatives marketplace says that it will stop listing additional Bitcoin Futures from this month of March 2019.

However, the existing and active contracts will be still available to trade as the last ones expire by June 2019. In a notice to traders last Thursday, March 14, CBOE exchange wrote:

“CFE 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.”

CBOE was the first one to launch the Bitcoin Futures contracts in December 2017 when Bitcoin was trading at its all-time high.

Its Bitcoin Futures contracts allowed investors to bet on whether the price of the world’s largest cryptocurrency will rise or fall in the future. The futures contracts expire every month, and thus the exchange has to keep listing them in order to keep the market alive. The CBOE Bitcoin Futures contracts were completely cash-settled, meaning that upon expiry, investors will be given the cash equivalent of their futures contract value instead of holding physical Bitcoins.

The CBOE’s withdrawal for Bitcoin Futures highlights the waning enthusiasm for the crypto token. Also, the ongoing regulatory uncertainty has delayed institutional participation in the crypto space. 

Although CBOE’s pull-back has left its rival - CME Exchange - undeterred from listing new Bitcoin futures contracts. The CME Group also launched Bitcoin Futures Contracts during December 2017, and says that it’s witnessing good volumes even today.

It remains to be seen if the latest CBOE pull-back has its ripple effects to new entrants like ICE’s Bakkt platform, which is planning to launch its Bitcoin Futures ahead this year in 2019.