Cryptocurrency Exchanges

CBOE Temporarily Discontinues Bitcoin Futures

March 25, 2019
Saad Mohammad


CBOE Temporarily Discontinues Bitcoin Futures

Bitcoin futures have experienced low trading volumes over the past few months, with the bear market still affecting global trading figures. The Chicago Board Options Exchange (CBOE) announced on March 14, 2019, that it had discontinued its Bitcoin futures contract for this month. The company did not state any specific reason for this action but indicated that its CFE futures platform is currently considering its position on digital currency derivative trading.

CBOE not adding XBT futures this month

The trading company in its official statement revealed that “CFE is not adding a Cboe Bitcoin (USD) (“XBT”) futures contract for trading in March 2019. CFE is assessing its approach with respect to how it plans to continue to offer digital asset derivatives for trading. While it considers its next steps, CFE does not currently intend to list additional XBT futures contracts for trading.”

The CBOE further clarified that the existing BTC futures contract is available to traders until June. The company encouraged traders to reach out to their trading desk if they need further information regarding the suspension of XBT futures on their platform.

This latest decision comes as a surprise as the CBOE futures contract have enjoyed much attention from the crypto space since it was launched in December 2017. Along with CME’s Bitcoin futures, they were regarded as significant steps needed to help BTC gain mainstream adoption by attracting institutional investors into the crypto space.

Despite the initial fanfare, things have gone downhill over the past few months as XBT trading volumes continue to plunge, partly due to the bear market that has been around since 2018. A study carried out by Tradeblock revealed that CBOE’s XBT futures have been playing second fiddle and losing some trading volumes to BTC futures from the Chicago Mercantile Exchange. The trading volumes recorded by the CME is significantly higher than that of XBT despite the two starting at similar volumes. In general, the Bitcoin contract futures trading volume has dropped since attaining its peak last summer.

Tradeblock stated that they tracked the Bitcoin futures trading volume on the CBOE and CME platforms since they were launched in December 2017. The two companies introduced similar products in the same month over the course of last year, but the CBOE has lost some of its market share to CME, the report added.

The report further noted that although the trading volume of Bitcoin futures experienced growth in the first few months after inception, spot trading activity reduced during that period. Tradeblock explained that due to the varying trend, the overall futures trading volume across both platforms became equal with the total spot trading volume recorded by the five largest cryptocurrency exchanges. However, the situation has changed as futures trading volume has plunged while spot volume has increased over the past few weeks.

The price of BTC is usually volatile before and after the expiration of an XBT futures expiration. However, this hasn’t happened in a while, with the BTC price seemingly unaffected by the recent futures contract expiration.

With the CBOE now temporarily disabling its Bitcoin futures, the general trend in the market is expected to change. The cryptocurrency space is also getting ready to introduce new BTC futures platforms including Coinflex, Bakkt, and Erisx, and it is still early to predict how the market will react afterward.

The cryptocurrency space continues to positively anticipate the launch of the Bakkt platform, which is backed by ICE, the company behind the New York Stock Exchange (NYSE). There is an expectation that the Bakkt platform will usher in institutional money into the cryptocurrency sector and this would help push the price of BTC higher, possibly bringing an end to the bear market.