CBOE Drops its Bitcoin Futures Program – by Letting it Expire


The Chicago Board Options Exchange is making big news Friday on announcements that it is not planning to add Bitcoin futures to its exchange this month.

In reporting in Cointelgraph this week, Aaron Wood shows off this quote from CBOE:

“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.”

This is big news partially because an existing Bitcoin futures market from the exchange expires in June. CBOE is not yanking the existing futures – they’re just not renewing the Bitcoin futures program.

Citing the need to “assess derivatives” is vague. It subtly rings bells of regulatory concern, but it also suggests that maybe the CBOE is just worried about some stakeholders getting their money out of the trades.

It’s also interesting because unlike other markets, a futures market is not something you just open and keep open without ongoing work. Those futures have to be assessed on a continual basis and that’s what the CBOE is not interested in doing right now. Will they open up another Bitcoin futures market in the future?

To many traders, this back and forth is not smart; it seems counterintuitive to start and stop a futures market. It tends to ring alarm bells about stability and persistence and a firm roadmap.

In his reporting on the CBOE move, Wood also cites a much noticed Bloomberg analysis by Mike McGlone indicating that crypto prices may be about to drop.

However, not everybody is crying in their soup about the CBOE.

“This is actually good news in many ways,” writes user Bitcoins and Gravy on the Cointelegraph comment thread. “And they won’t be the only ones regretting their decision 2 years from now.”

“Good riddance!” writes Spy_Gadget_Rentals, assumedly to the CBOE.  “Don’t let the door hit you on the way out!”

Some Reddit users are similarly unimpressed.

“CME will either raise its price targets or bow out like this or get rekt,” writes diydude today.  “You think it’s a coincidence that CBOE is throwing in the towel just a couple weeks after their honcho guy publicly whined that Bitcoin needs more government regulation? Nah, not a coincidence. Their dudes are getting rekt, and they’re being smart by cutting their losses now.”

Look for upcoming news on how the CBOE and other exchanges react to the growing critical mass around crypto.