Cboe Global Markets, one of the world’s largest exchange holding companies, announced that its futures exchange (CFE) is about to offer trading in bitcoin futures, under the ticker symbol ‘XBT’, beginning on the trading day of December 11, 2017. Trading will be free through December.
Cboe announced that CFE had filed a product certification with the Commodity Futures Trading Commission (CFTC) to offer bitcoin futures trading on December 1.
XBTSM futures are cash-settled contracts based on Gemini’s auction price for bitcoin, denominated in U.S. dollars. XBTSM futures were made available for participant testing on November 13, 2017. Owned by the Winklevoss twins, 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, that will be open to trading at CFE, are specifically designed to allow participants to implement straightforward trading strategies, through settlement to a single, tradeable auction price.
“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”, said Ed Tilly, Chairman and Chief Executive Officer of Cboe Global Markets.
Tyler Winklevoss, Chief Executive Officer of Gemini, commented: “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.”
CME Group, the world’s leading and most diverse derivatives marketplace, also announced that it has self-certified the initial listing of its Bitcoin futures contract, to be available for trading on the CME Globex electronic trading platform, Open to trading on Monday, December 18, 2017, CME Group will be seven days behind Cboe Global Markets.
Terry Duffy, CME Group Chairman and Chief Executive Officer, said: “We are pleased to bring Bitcoin futures to market after working closely with the CFTC and market participants to design a regulated offering that will provide investors with transparency, price discovery, and risk transfer capabilities.”
“Though we have worked through a lengthy, comprehensive process with the CFTC to get to this point, we recognize bitcoin is a new, uncharted market that will continue to evolve, requiring continued collaboration with the Commission and our clients going forward. At launch, our new Bitcoin futures contract will be subject to a variety of risk management tools, including an initial margin of 35 percent, position and intraday price limits, and a number of other risk and credit controls that CME Group offers on all of its products”, Duffy added.
CME Group’s Bitcoin futures will be cash-settled, based on the CME CF Bitcoin Reference Rate (BRR), calculated an published since November 2016, with assistance from Crypto Facilities Ltd. BRR aggregates the trade flow of major bitcoin spot exchanges during a calculation window into the U.S. Dollar price of one bitcoin as of 4:00 p.m. London time. The BRR is designed around the IOSCO Principles for Financial Benchmarks. Bitstamp, GDAX, itBit and Kraken are the constituent exchanges that currently contribute the pricing data for calculating the BRR.
The day of the announcements, December 1, was plenty volatile for BTC, which rebounded to trade above USD10,500, recovering from an earlier dip below USD 9,500, following the CFTC’s permission of CBOE and CME Group to list bitcoin futures. Bitcoin market capitalization has grown from less than $1 billion to over $183 billion, with daily notional turnover over $10 billion.