Cboe Global Markets is preparing to launch continuous trading in Bitcoin and Ether futures, a strategic move that could reshape the U.S. digital asset market. The launch is expected to take place on November 10, pending regulatory approval.
Features of Upcoming Futures Contracts
These new futures contracts will be uniquely structured as single, long-term instruments with a maturity of ten years. This contrasts with typical futures contracts that require periodic rollovers. Additionally, these contracts will be cash-settled and will undergo daily adjustments based on real-time spot prices through a transparent funding mechanism, similar to perpetual futures popular in offshore markets.
Impact on the U.S. Market
By integrating this innovative futures model into a U.S.-regulated environment, Cboe aims to attract traders who value security and transparency. Catherine Clay, Cboe’s global head of derivatives, highlighted the transformative nature of this move, stating, "Now, Cboe is bringing that same utility to our U.S.-regulated futures exchange and enabling U.S. traders to access these products with confidence in a trusted, transparent and intermediated environment." These proposed contracts are likely to expand the diversity of cryptocurrency trading methods in the U.S., offering long-term flexibility and daily price alignment.
Reasons for Launching the Initiative
This initiative has been driven by the rising adoption of perpetual-style futures in offshore markets, indicating a significant demand for continuous cryptocurrency exposure without the hassles of contract renewals. Clay remarked, "Perpetual-style futures have gained strong adoption in offshore markets." This approach reflects a larger trend where conventional exchanges are beginning to embrace digital assets, addressing the growing global appetite for cryptocurrencies.
Cboe's introduction of continuous futures for Bitcoin and Ether marks a strategic growth, aligning with rising institutional interest in cryptocurrencies. By designing these futures to accommodate the demands for continuous, long-term exposure and real-time price adjustments, Cboe aims to provide advanced trading options tailored to the complex needs of modern cryptocurrency investors.
