Bitcoin futures debuted on the Cboe last month, 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.
“Adena Friedman, chief executive officer of New York-based Nasdaq, said on Wednesday that the exchange operator is examining how they could create something different to what’s already on the market. Cboe Global Markets Inc. and CME Group Inc. introduced Bitcoin futures last year,” reports Bloomberg.
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.
However, the debut of bitcoin futures has not served as a launchpad for ETFs based on the cryptocurrency. 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Direxion, ProShares and VanEck are among a handful of ETF issuers that have withdrawn filings to launch bitcoin ETFs at the request of U.S. regulators.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.
The news of the withdrawn plans for cryptocurrency ETFs comes just days after the SEC said it is soliciting comments from the investing public on two proposed rules changes that could prompt the long-awaited introductions of bitcoin ETFs.
The SEC is seeking input on proposed rules changes by the Chicago Board Options Exchange (Cboe) that could allow the exchange to list up to four bitcoin ETFs. Cboe was the first exchange operator in the U.S. to introduce futures based on the volatile digital currency, having done so last month.
“Major exchange companies are beginning to look for ways to capitalize on mounting interest in cryptocurrencies, including Bitcoin,” according to Bloomberg. Cboe is exploring futures on other digital currencies after becoming the first U.S. exchange to introduce Bitcoin contracts in December. Bitcoin has the highest market capitalization among cryptocurrencies, followed by Ethereum and Ripple.
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