A recent announcement made it clear that the Chicago Mercantile Exchange (CME) Group plans to add more Bitcoin contracts. Specifically, this announcement made it clear that the CME seeks to add options to existing Bitcoin futures contracts during Q1 of 2020.
Bitcoin futures options will be introduced in Q1 of 2020
This news came in an official announcement on September 20th. Moreover, the announcement states that these plans are still “pending regulatory review”, meaning they are not set in stone. With that being said, however, it still seems likely the group will carry out this plan.
There’s a myriad of reasons as to why the CME looks to diversify it’s Bitcoin’s futures offerings. According to Tim McCourt, who is the CME Group’s Global Head of Equity Index and Alternative Investment Products, stable fundamentals support this decision.
“Based on increasing client demand and robust growth in our Bitcoin futures markets, we believe the launch of options will provide our clients with additional flexibility to trade and hedge their bitcoin price risk.”
Although the exact form of these products is still somewhat uncertain – presumably due to pending regulatory approval – McCourt went on to state that they will give traders greater tools to manage their Bitcoin exposure.
“These new products are designed to help institutions and professional traders to manage spot market bitcoin exposure, as well as hedge Bitcoin futures positions in a regulated exchange environment.”
Are Bitcoin futures good or bad?
In addition to this, the announcement also notes that the CME Group already seen massive growth in its Bitcoin sector. In fact, since it was launched back in December of 2017, more than 20 successful futures expiration settlements have taken place. Moreover, over 3,300 individual accounts are said to have been trading the CME’s existing Bitcoin futures product.
This news comes as institutional momentum for crypto appears to be building. Back in May of this year, CME Bitcoin futures hit an all-time high. However, more things are happening in this sector.
Specifically, the launch of Bakkt is drawing nearer and nearer. Earlier this month, Bakkt began accepting customers’ Bitcoin deposits as well as withdrawals. Furthermore, Bakkt also announced “Bakkt Warehouse”, which seeks to ensure the institutional Bitcoin futures company’s funds’ safety.
Nevertheless, one should note that the crypto industry is not entirely behind the notion of increased Bitcoin futures support. Futures and options are, by some, seen as overly affecting the price of crypto assets. No matter what, it will be interesting to see how this continues to evolve in Q1 of 2020.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.