The Chicago Mercantile Exchange (CME) is expected to launch Bitcoin (BTC) options on its futures contracts as soon as the first quarter of 2020. This is according to a recent announcement made by the institution in a press release published on September 20. Regulators must approve the proposal before the CME is able to offer these services.
CME To Offer Bitcoin Options
The CME entered the cryptocurrency market back in December 2017 when it started offering Bitcoin futures contracts. Although these were not physically-based futures, it allowed many investors to have access to the crypto market.
Now, the leading derivatives marketplace considers there is a growing demand for other investment instruments that would allow investors to gain exposure to Bitcoin.
Tim McCourt, the global head of equity index and alternative investment products at the CME Group, mentioned:
“Based on increasing client demand and robust growth in our Bitcoin futures markets, we believe the launch of options will provide our clients with additional flexibility to trade and hedge their bitcoin price risk.”
The Chicago Board Options Exchange (CBOE) has also started offering Bitcoin futures contracts. However, the CBOE was not able to deal with a staggering demand for Bitcoin futures, while the CME attracted more and more investors.
Since it was launched in December 2017, market users have adopted the CME Bitcoin futures for their trading needs. According to the report released by the company, there have been 20 successful futures expiration settlements and more than 3,300 individual accounts that have traded products.
Since the beginning of the year, almost 7,000 CME Bitcoin futures contracts have traded on average each day. That represents close to 0.16% of the total Bitcoin supply.
The cryptocurrency community is also waiting for the approval of a Bitcoin exchange-traded fund (ETF). This would allow larger investors to have access to Bitcoin and the whole crypto industry. However, the U.S. Securities and Exchange Commission (SEC) has been reluctant to approve a Bitcoin ETF.
The regulatory agency of the U.S. considers that the cryptocurrency market is not regulated and it is being manipulated. One of these main issues is related to exchanges that are performing washing trading activities in order to increase their volumes. Moreover, there were some reports that showed the stablecoin Tether (USDT) was used to avoid Bitcoin from falling even further during the bear market of 2018.