The CME Group has seen great success with its Bitcoin futures market and will be expanding it to also include options trading, the world’s leading derivatives marketplace said in a new announcement. Bitcoin options trading will be launched sometime in Q1 of 2020.
Bitcoin options trading is going live for the CME Group shortly, the financial giant said in a new press release. Although still pending regulatory review, the new ‘Bitcoin options market’ will function similar to the CME’s futures markets and will not be trading live Bitcoin. It is set for launch in Q1 2020.
CME Feeling the Heat from Bakkt
CME is likely expanding its Bitcoin-related marketplaces given that Bakkt will soon be launching a Bitcoin futures marketplace that is set to be the first to deliver monthly and daily futures contracts settled in real BTC. The expected competition among institutional investors was undoubtedly a consideration in the CME’s newly-announced expansion into Bitcoin options trading.
CME’s Bitcoin futures market has been gaining in trading volume throughout 2019, another reason why the exchange will be expanding its Bitcoin-related services. In fact, CME reported that it is seeing some of its highest daily trading volumes since its launch in 2017. This year alone, it has more than doubled its trading volume. CME estimated a few weeks ago that, on average, around $370 million was being traded across 7,237 contracts each day since the beginning of 2019.
All of this indicates that institutional interest in Bitcoin has exploded in 2019 and CME hopes to further capitalize on this momentum.
Details to Be Announced
The details of the new Bitcoin futures market from the CME has still yet to come out, but the market will definitely feel it when it launches. The rising futures trading volumes on CME likely fed into Bitcoin’s bullish rise this summer.
It will be interesting to see how CME’s Bitcoin-related marketplaces compare to Bakkt’s own once it launches—and whether investors prefer Bakkt’s futures market backed by actual BTC or CME’s backed by IOUs.
Do you think CME’s Bitcoin options marketplace will prove to be a success? Let us know your thoughts below in the comments.