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Why does the Chicago Board Options Exchange Stop Trading Bitcoin Futures ...?

Written By Hanny & Melissa on Saturday, March 16, 2019 | Saturday, March 16, 2019

CBOE (Chicago Board Options Exchange) will temporarily stop trading in Bitcoin. On Thursday (03/13), CBOE Global Markets spokesman said it would not open new Bitcoin futures trading for March 2019 under the pretext of reviewing how their parties worked on the crypto futures sector.

through announcements to customers, the futures exchange explained that it would not add the CBOE Bitcoin (XBT) futures contract to trade in March 2019. In addition, CBOE is considering the best strategy to continue offering digital asset derivative trading.

while the strategy was formulated, CBOE did not plan to add a new XBT contract. Nevertheless, existing Bitcoin futures contracts can still be traded. This means that the last contract opened will expire in June.

along with its competitors, the Chicago Mercantile Exchange (CME), CBOE made a scene in the crypto market at the end of 2017, when the two exchanges opened Bitcoin futures trading. but, later on CBOE's trading volume was somewhat disappointing and had no impact on the increase in Bitcoin prices, the market actually flushed to this moment.

Bitcoin's trading volume declined 80 percent since the beginning of 2018, and XBT CBOE failed to print volumes greater than US $ 1 billion since May 2018. The CBOE product produced less than half the volume achieved by CME. Meanwhile, CME traded 18,338 Bitcoin futures contracts last month, or US $ 360 million, which is a new record.

a number of crypto activists on Twitter and Reddit argued that the low trading volume and intense competition led to CBOE's decision to stop Bitcoin futures. John Todaro, a Twitter user, said, "This happened because the volume of the Bitcoin futures CBOE was overrun by CME".

Bitcoin prices don't seem to be affected by this news, but crypto communities on Twitter have diverse opinions, some are optimistic and some are pessimistic. Twitter user named Cryptosapien stated, this event bodes the price of Bitcoin has reached its lowest point. Futures contracts give investors access to an asset, such as Bitcoin, without having to hold the "original" Bitcoin. instead, investors buy contracts that track asset prices and speculate whether the price of the contract will go up or down on the expiration date.

The CBOE and CME futures contracts are settled in cash. that is, at the end of the contract period one party pays the opponent the difference between the spot price and the price of the Bitcoin futures in US dollars. On the other hand, competitors Bakkt and ErisX plan to offer Bitcoin futures contracts that are physically settled so that they involve genuine Bitcoin.

Meanwhile, the US Financial and Services Authority (SEC) is still considering accepting or rejecting the submission of a Bitcoin ETF (exchange-traded fund). Some claim the CBOE's decision will have a negative impact on the SEC's decision regarding the Bitcoin ETF. but there are also those who think a Bitcoin ETF will be approved soon.

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