Cboe launches benchmark index for bitcoin futures - The Industry Spread

Ricardo Esteves

Ricardo Esteves has seen business and economics through many lenses. He joined the Financial Services Industry in 2009, and has been a financial journalist since 2011. He holds a degree in Business Administration and has experience producing real-time news, from both buy-side and sell-side, as well as for retail traders, brokers and service providers. Esteves' work has appeared in a variety of online publications including FX Street and FinanceFeeds.

Cboe launches benchmark index for bitcoin futures

December 16, 2017

Following the listing of Cboe XBTSM Bitcoin Futures (ticker symbol: XBT) on Sunday, December 10, Cboe Global Markets, Inc. announced it has created a new strategy performance benchmark index designed to replicate a constant one-month position in XBT.

Cboe has exclusive license to Gemini bitcoin market data for derivatives and indices. Called Cboe Gemini Bitcoin Futures Index (ticker symbol: XBTX), the strategy benchmark is intended to provide an objective, rules-based approach to describing a particular investment outcome. In this case, it is designed to track the performance of a systematic strategy that holds a long position in XBT futures that is rolled continuously throughout the period between the futures last trade dates to maintain a constant one-month XBT futures exposure.

Intended to simulate a hypothetical long exposure to bitcoin through CFTC-regulated futures contracts traded on CFE, which settle to the auction price of bitcoin in U.S. dollars on the Gemini Exchange, the index is expected to provide investors and issuers a useful tool that can help them design and implement strategies that incorporate the use of XBT futures to meet their investment objectives.

Cboe, one of the world’s largest exchange holding companies, starts today disseminating values for the Cboe Gemini Bitcoin Futures Index through quote vendors.

The total value of all bitcoin outstanding has grown to over $290 billion, with all cryptocurrency tokens outstanding being estimated over $420 billion. Since the launch of bitcoin futures by Cboe, more than 5,000 XBT futures contracts (single counted) have been traded.

CME Group is also in the bitcoin futures race, with a first trading day scheduled on December 18. 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. This week, CME Group bitcoin partner BitGo has raised $42.5 million to accelerate the momentum of its technology among institutional investors.

Vela Trading Technologies, the leading market access technology provider, has already announced the support of Bitcoin futures for any firm that wishes to take advantage of these new futures contracts from Cboe Futures Exchange (CFE), CME Group Inc, and most recently from Nasdaq.

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