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CBOE Finishes Innovation, Other Crypto Futures Coming?

After the Commodity Futures and Trading Commission declared that 2 main exchanges could start to offer bitcoin futures to investors, people in the crypto community announced it as a jubilant day.

This decision was declared on December 1, 2017, and the price of Bitcoin increased by 13% on this news. It was seen as a great step into more mainstream finance for cryptocurrencies. For the first time, they were being admitted in a significant way by a leading government agency.

CBOE Global Markets Inc and CME Group were given the possibility to start offering these futures, which allow institutional investors to get involved with bitcoin in a much easier and more significant way.

As the productivity of these futures to date has been mixed because of volatile bitcoin prices since the beginning of 2018, it now appears that other cryptocurrencies will soon have their own futures contracts available for trade.

The rumors

On Tuesday, CBOE Global Markets Inc stated that informing the public that they have finished a technology update for their futures exchange during this past weekend.

On January 17 the company’s President Chris Concannon acknowledged that it is a sensible idea to eventually have derivatives for a variety of digital currencies, but his company’s exchange would not be in a position to launch these futures until their system’s software had been modified. Now that this has been finished, there is nothing standing in their way of a variety of tools on the entire spectrum of cryptocurrencies.

First Cryptocurrencies in Line?

While Concannon did not go into detail about what cryptocurrencies CBOE would be focusing on originally, there has been a lot of speculation doing the rounds in the crypto community.

Now, Bitcoin is at the top of the crypto mountain with $178 billion worth being in circulation. There are also 4 digital currencies that exceed a market cap of $10 billion and they are Ethereum, Ripple, Bitcoin Cash and Litecoin.

It would make sense that 1 or more of these higher market cap tokens would be high on the list of priorities for a derivate launch by CBOE.

The Updates

There was great job done on the CBOE Futures Exchange, including a latency decrease exceeding 80%. Transaction speed is highly important for merchants as a delay of even a couple seconds can have dramatical effects on the outcome of a trade.

Apart from this, they have made improvements to the order-by-order data feed, bandwidth thresholds, self-trade prevention, risk controls and complex spread order handling.

People wonder if CBOE’s competitor with bitcoin futures, CME Group will be following their lead and looking to launch futures for other cryptocurrencies. The CME Group seems to be taking a more prudent approach to extension and will most likely watch to see what happens with CBOE’s new offerings to see how they perform before making a strong decision.