As more and more investors seek exposure to digital assets, exchanges are racing to catch up.
CBOE Holdings announced Wednesday a partnership to use trading data from Gemini Trust, the virtual-currency exchange founded by Cameron and Tyler Winklevoss, to power bitcoin derivatives and indices.
CBOE has 14 trading venues, including the largest options exchange in the US and the largest stock exchange in Europe. It’s also the second-largest stock exchange operator in the US, and is home to the CBOE Volatility Index (VIX Index), known as the stock market fear index.
Under the agreement — which still has to be approved by the CFTC — CBOE would use Gemini price data on bitcoin, ethereum and other digital assets to create new indices for traders as soon as next year.
If approved, it could bring more regulation and stability to the largely unregulated cryptocurrency ecosystem. The SEC previously rejected a bitcoin ETF proposed by the Winklevoss twins in March.
“We very much look forward to responding to the growing interest in cryptocurrencies through the creation of bitcoin futures traded on a regulated derivatives exchange with the many expected benefits that this brings, including transparency, price discovery, deep liquidity and centralised clearing,” said CBOE Holdings Chairman and CEO Ed Tilly said in a release.
Interest in cryptocurrencies has risen in-step with bitcoin’s skyrocketing value, which is up almost six-fold in the last year, and CBOE is not the only exchange that’s interested.
LedgerX, backed by Miami International Holdings, won approval from the CFTC last week for a bitcoin options exchange. CME group also launched a bitcoin index last year, and is currently waiting for patent approval for virtual currency derivatives.
“Gemini’s key concerns in the cryptocurrency ecosystem have always been security, compliance, and regulatory oversight,” said Tyler Winklevoss, CEO of Gemini, in a statement. “By working with the team at CBOE, we are helping to make bitcoin and other cryptocurrencies increasingly accessible to both retail and institutional investors.”
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