CME and Cboe to Launch Crypto Products Next Year

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CME and Cboe to Launch Crypto Products Next Year

Along with institutional investors, cryptocurrency trading exchanges are on the way. Wednesday was a big day for cryptocurrency as two major exchanges revealed intentions to provide crypto-specific goods next year.

Cboe Global Markets, Inc. (CBOE) said that it would begin offering data and trading solutions to cryptocurrency investors in the second quarter of next year. Separately, CME Group Inc.’s (CME) Chicago Mercantile Exchange announced intentions to launch futures contracts in Ether (ETHUSD), the Ethereum blockchain’s native coin. CME already offers trading services for Bitcoin (BTCUSD) futures contracts on its platform.

The developments come as institutional investors prepare to enter the bitcoin sector. The proposed products are intended to capitalize on the rising demand for the new asset class.

Key Takeaways

  • Cboe and CME will offer new crypto products next year to suit institutional investors’ appetite for crypto investment.
  • Next year, Cboe intends to deploy trading and indexing products in three stages.
  • On February 8, 2021, the CME will begin trading in Ether futures contracts.

Will Second Time Be the Charm for Cboe?

Cboe is not unfamiliar with Bitcoin. In December 2017, the world’s biggest options trading exchange became the first licensed business in the United States to begin trading Bitcoin futures contracts. However, the service was cancelled in March 2019, claiming poor trade volumes.

This time around, the Chicago-based organization is taking a more measured approach to Bitcoin. It has collaborated with the New York-based crypto data startup CoinRoutes to create a product portfolio that delivers information on cryptocurrency prices and trading. According to a news statement, the project aims to increase openness in the crypto sector. (During its last foray into cryptocurrencies, the exchange collaborated with Gemini, a cryptocurrency exchange founded by the Winklevoss brothers, for Bitcoin price data.)

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Cboe’s service is aimed at institutional investors interested in cryptocurrency. According to Catherine Clay, director of information solutions at Cboe Global Markets, the exchange is improving its information products to be “of use to (traditional customers like institutional investors)… as they begin on that quest.”

While the details of Cboe’s offerings are not yet known, Clay has said that they may include cryptocurrency indexes, historical data, and tick data. Cboe will debut its products in three stages, beginning with product development and launch in the first quarter of next year, followed by product distribution in the second quarter.

CME Expands Its Crypto Product Portfolio

Meanwhile, CME, a Cboe rival, is expanding its crypto futures portfolio with the debut of Ether futures contracts on February 8, 2019. CME currently allows users to trade Bitcoin futures contracts on its platform. Each Ether futures contract will include 50 ETH and will be based on the CME CF Ether-Dollar Reference Rate from CF Benchmarks, a crypto data provider certified by the UK’s Financial Conduct Authority (FCA).The monthly contracts will be paid in cash.

“We think the launch of Ether futures will offer our customers with a vital tool to trade and hedge this rising cryptocurrency,” Tim McCourt, CME Group’s global head of equities index and alternative investment products, said in a press statement to online newspaper The Block.

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