‘Pull the plug’ is a phrase rarely associated with positive sentiment, but for the market, CBOE’s decision to cancel their Bitcoin futures is far more bullish than it sounds. Bitcoin The Chicago Board Options Exchange (CBOE) is the largest U.S. options exchange, which offers options trading of over 2,200 companies. Cash based futures settlements are used in certain types of futures and options contracts. When the futures contract expires, instead of the seller settling in the underlying asset, in this case Bitcoin, they deliver the . associated cash position In December 2017, CBOE was the first ever exchange to introduce Bitcoin futures, coinciding with the top of the Bitcoin roller-coaster market, in an effort to introduce institutional traders to the leading digital asset. However, CBOE have recently announced that they’re intending to on their current Bitcoin futures contract, which is set to expire in June 2019, following the price since CBOE’s futures contracts began trading. pull the plug 78% decline in BTC Likewise, CBOE largely lost much of their volume to CME cash backed Bitcoin futures, which were released a few days later also during December 2017, and captured much greater trading volumes throughout most of the futures contracts history. Why is this Positive News for Bitcoin? With BTC’s current push above $4000, many crypto analysts are suggesting that Bitcoin may indeed have found its bottom. That’s certainly the sentiment offered by CNBC’s Fast Money panel, who speculate that the end of the CBOE cash backed futures coincides with retail investors and shorts becoming exhausted and losing momentum, whilst institutional investors gear up to enter the market later this year. Institutional money, from the likes of Bakkt and Fidelity’s offerings, are just around the corner. This comes as custody options have become more robust, significantly reducing the need to trade futures contracts through exchanges such as CBOE. Bitcoin Cash Backed Futures were Damaging for Bitcoin Back in 2017 when BTC cash backed futures were first introduced, tech analyst Gene Munster stated: “ could have a material negative impact on the price of Bitcoin investors will have an easier time betting against bitcoin” [Bitcoin futures] [as] As it happens, this was true. Shortly after CBOE and CBE launched their futures contracts in December 2017, the price of Bitcoin plummeted. Cash based Bitcoin futures essentially allowed speculative investors to bet against the price of Bitcoin, and settle in cash. In contrast, Bakkt’s upcoming BTC futures is settled in Bitcoin, providing a derivative much more closely correlated with the actual Bitcoin market itself. Many have speculated that CBOE’s cash backed futures led to particularly wealthy participants intentionally causing market volatility within the BTC markets, to profit in cash via positions in cash backed futures contracts. Whilst this is of course highly speculative, in the community seems to have welcomed the close of the the CBOE BTC futures with open arms. overall sentiment cryptocurrency

Bitcoin Cash

Disrupting Trade Finance with Blockchain Technology

As Cardano Gears up for Shelley, here’s Three Things You Need to Know

Read My Stories

Too Long; Didn't Read

Download free Tech Leaders Productivity Report!

CBOE Pull the Plug on Bitcoin Cash Based Futures —and Why this is a Good Thing for Bitcoin.

About Author

Comments

TOPICS

THIS ARTICLE WAS FEATURED IN

Related Stories

Untitled Story

Abundant Oracles: How Much Data Is Too Much Data?

06/09/2018: Biggest Stories in the Cryptosphere

06/02/2018: Biggest Stories in the Cryptosphere

05/02/2018: Biggest Stories in the Cryptosphere

0 to Pro Crypto Trader: Your Ultimate Guide to Bitcoin and Altcoin Investing

Abundant Oracles: How Much Data Is Too Much Data?

06/09/2018: Biggest Stories in the Cryptosphere

06/02/2018: Biggest Stories in the Cryptosphere

05/02/2018: Biggest Stories in the Cryptosphere

0 to Pro Crypto Trader: Your Ultimate Guide to Bitcoin and Altcoin Investing

Light-Mode

Classic

Newspaper

Dark-Mode

Neon Noir

Minty

HN StartUps