CBOE Set to Launch Bitcoin and Ethereum Continuous Futures

By: Isha Das

CBOE Global Markets is gearing up for the launch of a groundbreaking financial product—a continuous futures contract for Bitcoin and Ethereum—slated to debut on November 10, pending regulatory approval. This move represents a significant development in the cryptosphere as it aims to provide a seamless and efficient avenue for traders and investors desiring long-term exposure to these leading cryptocurrencies.

The continuous futures contracts, structured as long-dated instruments with a 10-year expiration, promise to simplify the trading process. Unlike traditional futures that require periodic rolling, these contracts will eliminate such necessities, thereby easing position management for market participants. The contracts will be cash-settled, aligning with real-time spot market prices through daily cash adjustments, which will use a transparent funding rate methodology.

CBOE Clear US, a derivatives clearing organization governed by the Commodity Futures Trading Commission (CFTC), will oversee the clearing of these contracts. This launch is strategic, intending to provide a perpetual-style utility that has been prevalent in offshore markets, now within the regulated confines of U.S. markets. The contracts target institutional players, current CBOE Futures Exchange (CFE) customers, as well as retail traders eager to dive into the world of crypto derivatives.

The announcement coincides with a broader context of regulatory evolution in the U.S., marked by a cooperative initiative between the Securities and Exchange Commission (SEC) and the CFTC. These regulatory bodies are working towards harmonizing digital asset oversight, as fragmented regulations have previously driven innovation overseas. A key roundtable, scheduled for September 29, will delve into strategies for global market alignment, addressing issues such as expanded trading hours, perpetual contracts, and portfolio margining.

This new futures launch by CBOE is a significant extension of its CFE product suite, which already includes products focused on equity volatility, cryptocurrencies, and global fixed income. It signals a forward step toward legitimizing perpetual swap trading often conducted on offshore platforms, potentially ushering in a new era of innovation and regulatory stability in U.S. financial markets. Educational initiatives are also part of the build-up, with CBOE’s Options Institute set to offer public courses on continuous futures leading up to the launch.