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CBOE to Launch Margined Bitcoin Futures Trading in 2024

CBOE Considers Relaunching Bitcoin Futures: Regulatory Concerns and Growing Institutional Interest

The below is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now. The Chicago Board Options Exchange (CBOE), the …,

CBOE Considers Relaunching Bitcoin Futures

The Chicago Board Options Exchange (CBOE) is actively exploring the possibility of relaunching bitcoin futures contracts. The exchange had initially introduced such contracts in December 2017 but later had to step back due to regulatory concerns and a decline in investor interest.

The CBOE has made significant progress in its discussions with the U.S. Commodity Futures Trading Commission (CFTC) regarding the relaunch of bitcoin futures. The exchange hopes that with the increased regulatory clarity and growing institutional interest in cryptocurrency, the time might be right for reintroducing these futures contracts.

Regulatory Concerns

The withdrawal of CBOE’s bitcoin futures contracts in 2019 came as a result of several concerns raised by the CFTC. One of the primary concerns was the potential for market manipulation, given the relatively small size of the bitcoin market at the time. The CFTC had also expressed reservations about the lack of adequate surveillance and compliance practices related to digital assets.

The CBOE has been working closely with the CFTC to address these concerns and create a framework that satisfies regulatory requirements. The exchange aims to incorporate enhanced market surveillance measures and implement necessary safeguards to prevent manipulation. These efforts will play a crucial role in gaining regulatory approval for relaunching bitcoin futures.

Growing Institutional Interest

The rise in institutional interest in bitcoin and other cryptocurrencies has been a significant factor motivating the CBOE’s consideration of relaunching bitcoin futures. Over the past few years, there has been a noticeable shift in sentiment among traditional financial institutions towards digital assets. Several prominent companies, including Tesla and Square, have added bitcoin to their balance sheets, further bolstering crypto’s credibility.

Institutional investors, such as hedge funds and asset managers, are increasingly looking for regulated investment products in the cryptocurrency market. The reintroduction of bitcoin futures by a reputable exchange like the CBOE would provide them with a trusted platform to gain exposure to the digital asset. This, in turn, could lead to increased liquidity and more stable pricing in the bitcoin market.

The Future of Bitcoin Futures

If the CBOE successfully relaunches bitcoin futures contracts, it could have a significant impact on the overall crypto market. The introduction of futures contracts in 2017 had led to increased institutional participation in bitcoin trading. A potential relaunch could further strengthen this trend and pave the way for more sophisticated investment products tied to cryptocurrencies.

However, it is important to note that the success of bitcoin futures largely depends on market demand and participation. The CBOE will need to assess investor interest and market conditions carefully before finalizing its decision.

Overall, the potential relaunch of bitcoin futures contracts by the CBOE showcases the ongoing maturation of the cryptocurrency market. As institutional interest continues to grow and regulatory frameworks evolve, it is likely that we will see a broader range of investment products and increased adoption of cryptocurrencies in traditional finance.

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