Cboe Global Markets, a derivatives and securities exchange network, is preparing to launch the Cboe FTSE Bitcoin Index futures. Trading is projected to commence on the Cboe Futures Exchange on April 28, pending regulatory approval.
The exchange aims to enable traders to manage their Bitcoin exposure with a more comprehensive set of tools.
Big Players Want In!
The new futures contracts will be launched in collaboration with FTSE Russell, an established index and benchmark provider specializing in creating innovative products in the digital asset markets.
The contracts will be based on the FTSE Bitcoin Reduced Value (1/10th) Index (XBTF). This means that these contracts will reflect one-tenth of the value of the FTSE Bitcoin Index instead of reflecting the full price.
The contract size can make it easier for traders to manage their exposure to Bitcoin without having to handle the full volatility of the cryptocurrency’s price movements.
The XBTF futures are cash-settled, meaning that instead of the physical delivery of Bitcoin, the contracts will be settled in cash based on the index value at the contract’s expiration. Settlement will occur in the afternoon (P.M.) on the last business day of each month.
The futures are designed to complement Cboe’s recently launched options on the Cboe Bitcoin U.S. ETF Index. CBOE believes that these new contracts will be useful for market participants looking to implement numerous trading and hedging strategies related to Bitcoin’s price volatility.
Commenting on the launch, Catherine Clay, Global Head of Derivatives at Cboe, said it aims to meet the increasing demand for crypto exposure and the need for capital-efficient and versatile tools.
According to her, this new product will enhance Cboe’s existing Bitcoin product ecosystem, which includes spot Bitcoin ETFs listed on their equities exchange and Bitcoin ETF index options.
Broad Digital Asset Offerings
Cboe has been actively expanding its offerings in the digital assets space. The exchange has listed a number of spot Bitcoin and Ether ETFs in partnership with major fund managers like Franklin Templeton, VanEck, Fidelity, WisdomTree, ARK Invest, 21Shares, Invesco, and Galaxy Digital.
The upcoming launch is part of Cboe’s ongoing efforts to broaden its digital asset offerings, giving customers more flexibility and choice.
Apart from cash-settled index options related to the spot price of Bitcoin, Cboe also offers margined Bitcoin and Ether futures, which are currently traded on the Cboe Digital Exchange. These futures are planned to migrate to the Cboe Futures Exchange (CFE) in the second quarter of 2025, pending regulatory approval.
The exchange is seeking greenlight from the SEC to allow options trading on four Ether ETFs, including Fidelity Ethereum Fund, Bitwise Ethereum ETF, Grayscale Ethereum Trust, and Grayscale Ethereum Mini Trust.
The SEC has acknowledged all the proposals but has delayed its decision on whether to accept them. The deadline for the decision is set for May this year for the Fidelity Ethereum Fund options.
Not only Cboe, Nasdaq ISE is looking to list options on BlackRock’s iShares Ethereum Trust (ETHA). The securities regulator has also pushed back the decision deadline for the proposed rule change, with the new deadline expected this month to make a final ruling on this proposal.
Asset managers are diversifying their crypto ETF options to cater to their customers’ demand and needs. The current regulatory environment is particularly beneficial to achieving that.
In addition to options on spot Bitcoin and Ether ETFs, some firms have started to bet on the SEC’s easing approach to crypto regulations by submitting proposals to incorporate staking into their spot Ethereum ETF.
This functionality was previously removed from their original ETF pursuit due to the SEC’s stance that staking is a form of securities.
