Crypto-Futures Revolution Just Starting as Cboe Clears a Hurdle
Crypto-Futures Revolution Just Starting as Cboe Clears a Hurdle
(Bloomberg) -- Futures linked to cryptocurrencies besides Bitcoin may have just gotten a step closer to reality.
Cboe Global Markets Inc., which introduced Bitcoin futures in December, finished upgrading the technology at its futures exchange over the weekend, according to a statement Tuesday. President Chris Concannon said on Jan. 17 that while it makes sense to bring derivatives to other digital currencies, his company wouldn’t act until the Cboe Futures Exchange’s software was overhauled. That’s done now.
Concannon didn’t specify which digital tokens are ripe for Cboe’s attention. All Bitcoin in circulation are worth $182 billion, according to Coinmarketcap.com. Four others have market values that exceed $10 billion: Ethereum, Ripple, Bitcoin Cash (an offshoot of the original Bitcoin) and Litecoin.
Enhancements to the Cboe Futures Exchange include a more than 80 percent reduction in latency, or the speed at which traders can get their orders completed. Shorter times are especially appealing to market makers -- often dubbed high-frequency traders -- that facilitate much of the buying and selling on modern exchanges. This could help them provide even more liquidity, possibly making Bitcoin prices more efficient.
CME Group Inc., an exchange that began offering Bitcoin futures a week after Cboe in December, has expressed more caution about expanding to other cryptocurrencies. “To say that you should just automatically go ahead and list others I think is a little irresponsible right now,” CME Chief Executive Officer Terry Duffy said Feb. 1 during an interview at Bloomberg’s headquarters in New York. “We need to learn more.”
--With assistance from Annie Massa
To contact the reporter on this story: Nick Baker in Chicago at nbaker7@bloomberg.net.
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steven Crabill, Vincent Bielski
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