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October 16, 2018

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No Altcoin Futures on the Near Horizon

July 27, 2018


Now that they’ve had some success with Bitcoin Futures, many have been wondering if the Chicago Mercantile Exchange will soon expand its support of Cryptocurrencies in the form of futures contracts, to Altcoins.


As of now, according to the exchange’s CEO, Terry Duffy, the answer is a resounding, not yet.


On Thursday, an interview with Duffy was released by Bloomberg that indicated that the CME is taking a very cautious approach towards the next steps in its Crypto futures contracts.


If you do not already know, a Crypto futures contract is essentially a contract with a licensed exchange in which you bet on the price of an asset like Bitcoin over a specific period of time. More specifically, it is a legally binding contract to sell this asset at a predetermined, future price. If the investor is wrong, then he or she is legally obliged to pay the money back to the exchange.


Duffy even went so far as to suggest that they may have met a large level of resistance from certain players in the traditional finance industry due to their launch of Bitcoin futures contracts. He even appeared to cite this suggestion as the reason for the CME’s reticence to rush into any different contracts for 2018, at this time.


In giving further detail on the subject, Duffy reportedly added that he believed that Altcoin futures contracts are more volatile than Bitcoin futures contracts, which is a fact that is actually fairly supported by the movement of asset prices on the market.


Even so, the CME’s launch of Altcoin futures contracts might come sooner than they want us to believe, given the state of competition in their niche.


According to an original article by Cointelegraph on the subject, the Chicago Board Options Exchange, which is the CME’s main competitor, is taking a more active approach.


Since CBOE is specifically monitoring its opportunities in other Crypto futures markets, one can reasonably assume that the CME might soon follow suit. The fact that they have been steadily making a profit on their Bitcoin contracts can only serve to help this possibility.


To do so, however, would also require being sure on the state of regulation in all of the markets that the CME intends to operate in. Given that their primary market is the USA and the USA currently has more than two regulatory definitions of how Cryptocurrencies should be treated under the law, this might be impossible to do, as of now.



By: BGN Editorial Staff


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