Cboe Global Markets has revealed its intention to introduce innovative futures contracts based on the price movements of Bitcoin
These contracts, termed “continuous futures,” are slated for launch on November 10th, as per a press release issued on September 9th.
Unlike standard, shorter-term contracts, these feature a longer lifespan, stretching up to a decade. This design intends to facilitate a more seamless approach for market participants to maintain their investment exposure to digital assets over extended periods, reducing the need for frequent contract rollovers.
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While these contracts do possess an eventual expiration date, their mechanics resemble those of perpetual contracts common on international and decentralized exchanges. Perpetual contracts are a favored method for crypto traders, enabling them to mirror spot prices without the constraint of fixed settlement dates.
In a similar vein, Cboe’s newly planned product employs periodic funding rate adjustments. This mechanism aims to maintain alignment with the present market valuation of both Bitcoin and Ethereum. It is also worth noting that all settlements will be conducted in cash.
According to Catherine Clay, who is in charge of the derivatives division at Cboe, the driving force is to transplant a well-known tool from overseas exchanges into a regulated framework within the U.S.. Her statement was:
Perpetual-style futures have experienced significant adoption in markets outside the US. Now, Cboe aims to introduce this functionality to our futures exchange within the United States regulatory environment.
Analysis originating from Kaiko, a cryptocurrency data provider, shows that perpetual contracts were responsible for about 68% of all Bitcoin trading volume across the whole crypto marketplace in 2023.
Coinbase recently made public their plan to launch a novel futures instrument known as “Mag7 + Crypto Equity Index Futures”. But what are the actual objectives of this offering? Find out the details here.