Bitcoin Futures Contracts Halted By CBOE Exchange

News | April 3, 2019 By:

CBOE Global Markets, the exchange group behind the first market for bitcoin futures, recently announced that it’s reviewing its approach to crypto derivatives and does not plan to list additional bitcoin futures contracts.

CBOE launched the first US bitcoin contracts, caled XBT, in December 2017, around the time the underlying cryptocurrency hit an all-time high near $20,000. XBT futures contracts were aimed at making it easier for investors and speculators to trade the new asset class. It was soon followed by similar offerings from CME Group, which continues to list its futures product.

In an online post published last month, CBOE said that it will not be adding an XBT futures contract for trading this month, citing a need to review how it approaches the space.

“CFE is assessing its approach with respect to how it plans to continue to offer digital asset derivatives for trading,” CBOE said. “While it considers its next steps, CFE does not currently intend to list additional XBT futures contracts for trading.”

CBOE, however, said that currently listed XBT futures contracts will remain available for trading. Future contracts expire monthly, and the exchange must continue to list new ones to ensure that trading continues. CBOE currently has three bitcoin futures contracts – XBTJ19, XBTK19 and XBTM19. These contracts will expire in April, May and June.

While the reasoning behind the move was not disclosed, some industry analysts believe the move indicates that there’s no widespread institutional demand for the product.

According to the Wall Street Journal (WSJ), trading volumes in CBOE’s bitcoin futures have lagged behind those of its larger crosstown rival, CME Group.

“The last trading day before CBOE’s announcement came out, close to $90 million worth of CME’s bitcoin futures changed hands, compared with around $8 million worth of CBOE’s contracts, according to data from the two companies,” WSJ said.