Bitcoin futures contracts unlikely to be changed on CME in March

Posted 18 March, 2019

Unlike CBOE, Chicago Mercantile Exchange stated that it would revise its bitcoin futures offering.

The company spokesperson confirmed that the exchange has no plans to change bitcoin futures contracts that are being offered on CME. Market analysts believe that CME's offering looks much more profitable and well-designed.

At the same time, trading on the Cboe is mainly based on the Cboe Volatility Index or so-called fear index. If a trader sees no sense in any particular contract, there will be no reason to pay extra money to access bitcoin futures market.

On the CME, bitcoin-futures are listed in the category of high-liquidity assets with a huge daily turnover.

However, bitcoin-futures on the Cboe are well behind those on the CME in terms of the trading volumes. This is probably one of the reasons behind the decision by Cboe management not to list bitcoin futures in March. 

It should be taken into account that Cboe's price data is based on Gemini figures, while CME receives the data from a few different exchanges. This fact can bring some competitive advantage to the latter. In addition, CME designed its bitcoin-futures contracts to a wider group of traders. 

A representative of a crypto-derivative platform shared his opinion saying that these exchanges see different demand for their offerings probably due to different promotion policies. As he added, traders at the CME and CBOE do not have to pay extra fees to enter new market otherwise they need to spend money on the access, software license, market data and cross-connection just to trade new product. At the same time, it is too expensive for traders to join both exchanges.

CME's crypto product is believed to lure traders by its flexibility, in particular, better position limits. Cboe also raised limits but this move was too late to catch up with CME.

For reference, Cboe announced that it would not list bitcoin futures in March last week citing a need for revision of its business approach to this product.

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