The market for bitcoin futures is heating up

Carl Court / Getty Images
  • Cboe Global Markets’ bitcoin-futures market is heating up after launching on Sunday evening.
  • Ed Tilly, the CEO of the exchange group, told Business Insider that volumes and the number of participants in the market were picking up.

The market for bitcoin futures is heating up.

With much fanfare, Cboe Global Markets’ bitcoin future contracts started trading Sunday. The new market, which allows investors to bet on the future price of bitcoin, sent the digital currency up by more than $US1,000 within the first 10 minutes of its launch, and Cboe’s website crashed.

Still, volumes were relatively low and the order book thin, with only 800 contracts traded within the first two hours and a handful of participants, according to Cboe.

But Cboe CEO Ed Tilly told Business Insider in an interview Monday morning that the market was picking up.

For starters, volumes have more than quadrupled, to 3,350, according to Bloomberg data. More participants are entering the market as well, Tilly said.

“I am pretty pleased,” Tilly said of the market launch. “We started with about 12 participants in the market – some of them are trading for customers. That’s up to 22 this morning.”

Tilly said he expected that number to build over the coming days and weeks as trading firms and brokers waiting on the sidelines see the order book fill up.

Tilly said he had talked to a brokerage firm considering clearing the new products for customers but “wants to wait and see and then make their decision midweek.”

“They didn’t raise a concern about the market,” he said.

TD Ameritrade is one such firm taking a “wait and see” approach. JB Mackenzie, a managing director on the brokerage’s futures and foreign-exchange trading team, said in an interview with Business Insider on Thursday that the firm was waiting for the right amount of liquidity in the market before jumping in.

Mackenzie couldn’t immediately be reached for an update.

As for the future of the cryptocurrency world, Tilly said a futures market for bitcoin could pave the way for the listing of the first exchange-traded fund linked to bitcoin, which could bring a lot more money from retail investors into the burgeoning market for bitcoin.

Van Eck and REX Shares proposed such a product in a filing with the Securities and Exchange Commission on Monday.

The US regulator rejected an earlier attempt by Bats Global Markets, which Cboe acquired earlier this year, to list a bitcoin exchange-traded fund with Gemini, a cryptocurrency exchange.

“It’s going to take time,” Tilly said. “The mandate of the SEC is consumer protection, so they are going to be diligent.”

He added: “But we will get there.”


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