Bitcoin is looking good in the eyes of the CME Group once again.
The CME Group, two years after releasing Bitcoin Futures contracts, is set to unveil Bitcoin Options in the first quarter of 2020. Timing being the key here, derivative contracts for cryptocurrencies seem to be a trend now.
Spurring interest earlier this month, the CME dropped hints that another Bitcoin product could hit its shelves. Speaking to market makers, the exchange began gauging interest and building strong foundations for the next set of derivatives products, building up institutional demand on the cryptocurrency front, something which has been on the rise.
Tim McCourt, the CME Group’s Global Head stated that owing to “increasing client demand and robust growth,” within this regulated Bitcoin market, the options launch will provide “additional flexibility,” within Bitcoin trading. He added,
“These new products are designed to help institutions and professional traders to manage spot market bitcoin exposure, as well as hedge Bitcoin futures positions in a regulated exchange environment.”
With cross-town rival CBOE dropping out of the BTC Futures race earlier this year, CME operated unrivalled for the better part of this year. But now, a new entrant beckons, and the latter is growing wary.
BAKKT INTO A CORNER
Bakkt, Intercontinental Exchange’s [ICE] digital assets platform, will go live with its Bitcoin Futures contracts geared for institutional clients, with the aim of stealing the derivatives market. The major sell for the ICE project is physically delivered Bitcoin contracts, as opposed to the CME’s cash-settled contracts.
The difference, from a puritan perspective, is crucial here. CME Bitcoin contracts are simply a contractual representation of 5 Bitcoins being traded between institutional clients, and not physical movement, while Bakkt has gone the extra mile of ensuring custody solutions as well,