CBOE Plans to Re-Enter Crypto Market with New Products Amidst Increased Demand

CBOE Plans to Re-Enter Crypto Market with New Products Amidst Increased Demand

World’s leading options trading platform CBOE Global Markets is planning to re-enter the cryptocurrency derivatives market after a few failed attempts in the past, according to a report by Bloomberg.

Despite multiple setbacks, CBOE maintained that it hasn’t given up on the crypto space, and is still interested in developing crypto-based products, especially now that the demand for such products is on the rise. CEO Ed Tilly said:

“We’re still interested in the space, we haven’t given up on it. We’re keen on building out the entire platform. There’s a lot of demand from retail and institutions, and we need to be there.”

The high interest in cryptocurrencies especially since the second half of 2020, has increased investments in the crypto market, and particularly from institutional investors. Top entrepreneurs like Elon Musk, Jack Dorsey, Michael Saylor, and numerous others have committed considerable stakes of their companies to Bitcoin as a sound reserve asset.

CBOE Has Tried the Crypto Market Severally

CBOE and CME (the world’s leading futures exchange) are the biggest derivatives markets in the world. But unlike CBOE, CME has seen more success in the crypto market as the biggest futures trading exchange for Bitcoin and more recently Ethereum.

Additionally, CBOE was the first US exchange to launch bitcoin futures in December 2017, and the last of its Bitcoin futures contract settled in June 2019. After the first failed attempts, other announcements followed in September 2019 (to launch in 2020) and December 2020. The latter announcement at the time specified that the CBOE will relist bitcoin futures again in Q2 2020. 

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In September 2019 CBOE, withdrew a proposal to the US SEC submitted under its CBOE’s BZX exchange, to list and trade VanEck SolidX Bitcoin Trust’s shares. However, the exchange has refiled the request earlier in March 2021 and is presently awaiting approval from the US SEC. Tilly added:

“We’re very keen to move along approval for the VanEck ETF.”

In mid-December 2020, CBOE partnered with crypto market data provider CoinRoutes to gain access to CoinRoutes base for creating data, indices, and analytics products.  CoinRoutes is a New York-based trading software firm that provides a range of algorithmic trading tools for digital assets, forex, and derivatives.

The firm has an innovative, trademarked product, RealPriceTM that is waiting to be patented and uses collective Best-Bid-Offer from all top crypto exchanges. It incorporates data in real-time, the actual cost to trade specific quantities of digital assets.

“CBOE expects to offer select RealPrice data on its CSMI Cryptocurrency (CCCY) channel by the end of first quarter 2021.”

The agreement marked CBOE’s official entrance into the crypto data business, which the exchange promised to avail of by the end of Q1 2020. The two firms aim to bring transparency to crypto assets by using RealPrice data. The goal is to create trading products and information that will attract new investors by helping them understand the cryptocurrency concept and encourage participation in the market.