When it comes to futures on digital currencies trading in the U.S., bitcoin is the only game in town, but that may not be the case for much longer.
Bitcoin futures debuted on the Cboe in December, followed by a launch on the CME. Nasdaq Inc. is still considering entering the bitcoin futures competition.
Market observers previously expected Nasdaq to launch futures on the digital currency this year, perhaps as early as the second quarter.
“Cboe Global Markets Inc., which introduced Bitcoin futures in December, finished upgrading the technology at its futures exchange over the weekend, according to a statement Tuesday,” reports Bloomberg. President Chris Concannon said on Jan. 17 that while it makes sense to bring derivatives to other digital currencies, his company wouldn’t act until the Cboe Futures Exchange’s software was overhauled. That’s done now.
After bitcoin, the largest cryptocurrencies are Ethereum, Ripple, Bitcoin Cash and Litecoin.
Derivatives help increase liquidity and improve markets for an asset category by allowing investors to bet on ups and downs of an asset, evening allowing individuals to adopt market-neutral strategies. They are also a key component in the creation of many futures-backed ETFs utilized by a range of investors.
Although bitcoin futures were viewed by many market observers as a potential segue to ETFs backed by the digital currency, U.S. regulators have yet to approve any such funds.
In fact, ETF issuers have been withdrawing plans for bitcoin funds. Direxion, ProShares and VanEck are among a handful of ETF issuers that have withdrawn filings to launch bitcoin ETFs at the request of U.S. regulators. The Securities and Exchange Commission (SEC) requested the issuers withdraw their filings.
“Concannon didn’t specify which digital tokens are ripe for Cboe’s attention. All Bitcoin in circulation are worth $182 billion,” according to Coinmarketcap.com. Four others have market values that exceed $10 billion: Ethereum, Ripple, Bitcoin Cash (an offshoot of the original Bitcoin) and Litecoin,” according to Bloomberg.
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