CME Exec: No Plans for Physically Settled BTC Contracts Currently

Must Read

Opera-Backed Fintech OPay Seals $120M Investment to Grow Across Africa

Lagos-headquartered fintech Opay has sealed $120 million in a series B financing round from a host of...

Maker Launches New Dai Today, Expects to Phase-Out Old Dai in Months

Decentralized autonomous organization (DAO) Maker will launch a new type of Dai (DAI) stablecoin today. Known as...

Visa Works on Blockchain System For Large-Scale Private Data

International payment network Visa is working on a blockchain-based system for joint policy-compliant computation of large-scale private data.
- Advertisement -

The Chicago Mercantile Exchange (CME) Group has no current plans to launch physically settled Bitcoin (BTC) contracts, a senior executive said.

Tim McCourt, global head of equity index and alternative investment products at CME Group, told MarketsMedia on Oct. 1 that all new contracts or products are driven by customer demand.

CME’s new options will be settled in BTC futures

CME has been trading BTC futures since December 2017 and recently revealed plans to launch options in the first quarter of 2020, pending regulatory review.

Its current Bitcoin futures contracts are settled in cash. McCourt said that “the number one demand from customers has been for options on our futures” since the launch of its futures product.

Since December 2017, there have been 20 successful futures expiration settlements, with more than 3,300 individual accounts trading the product. Year to date, reported 7,000 CME Bitcoin futures contracts — equivalent to roughly 35,000 BTC — were traded on average each day, breaking a new all-time high this May. 

Institutional interest in Bitcoin is growing

McCourt noted that “institutional interest in bitcoin is growing but they need time to become familiar with the market and get approval to use new products.” Current participation is reportedly spread between hedge funds, commodity trading advisors and asset managers, as well as crypto-focused hedge funds and trading firms.

The planned forthcoming options will use CME Group’s existing technology, matching engine and clearing mechanisms, and the product is currently undergoing the Group’s standard testing procedures.

Bakkt launches physically settled futures to tepid market

In late September,  Intercontinental Exchange launched its much-anticipated Bakkt, a regulated platform offering physically settled BTC futures contracts and custodial services approved by the Commodity Futures Trading Commission.

Sluggish launch of the new product has in part been identified as a possible contributing factor to Bitcoin’s recent price weakness: in the days following Bakkt’s debut, BTC/USD plummeted from near $10,000 to under $8,000.

Bakkt COO Adam White earlier told reporters that the platform hoped its futures would aid price discovery long-term

- Advertisement -
- Advertisement -

Latest News

11 Years Ago Today Satoshi Nakamoto Published the Bitcoin White Paper

Today, Oct. 31, marks eleven years since the publication of the Bitcoin white paper by the still-mysterious person or...
- Advertisement -

ArBinance is Changing the Crypto Arbitrage Game with the Click of a Button

ArBinance is a professional arbitrage trading platform that aims to revolutionize cryptocurrency trading by allowing its users to conduct crypto arbitrage through...

SmartMixer is Making Bitcoin Mixing Easier for a New Generation of Users

SmartMixer is Making Bitcoin Mixing Easier for a New Generation of Users SmartMixer.io is a new bitcoin mixing service especially geared toward...

Bitpanda goes global: Announcing the Bitpanda Global Exchange and the IEO for the ecosystem token BEST

Bitpanda goes global: Announcing the Bitpanda Global Exchange and the IEO for the ecosystem token BEST Vienna-based fintech Bitpanda...

Bitpanda digitizes physical gold and silver

Vienna, 13 May 2019 – Vienna-based fintech Bitpanda launches gold and silver trading for its 1 million users. The new...