'No Change' to Bitcoin Futures Plans, CME Says, as Cboe Pulls Back

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It's business as usual for CME Group's bitcoin futures market, despite a retrenchment by rival derivatives exchange operator Cboe Global Markets.

The affirmation is notable in light of the news Thursday that Cboe will not add a bitcoin futures contract for trading in March.

As of March 14, for example, the daily trading volume of CME's bitcoin futures was reported at 4,666 contracts, compared to 2,089 contracts at Cboe.

Market participants offered several explanations for CME's outperformance of Cboe in bitcoin futures.

"Connecting to both CME and Cboe is expensive. If you are already trading other products on an exchange, then there is no new cost. If not, you must pay for connectivity, software license, market data, cross connects etc. - all that just to trade one new product?".

Cboe put the bitcoin futures on its Cboe Futures Exchange, Sarumi goes on, where people mostly trade Cboe Volatility Index Futures: "If you don't trade VX then do you want to pay hundreds of dollars extra per account just to dabble in bitcoin?".

CME group, on the other hand, put bitcoin in the equities group on the CME exchange, which offers a lot of products and asset classes enjoying large daily volumes, Sarumi said.

So a lot of traders already trading various assets at CME had no additional steps to take to get into bitcoin.

CME invested more effort in promoting its futures than Cboe did, Sarumi believes.

"Over time, the CME gained greater market share. The Cboe raised contract limits in order to remain competitive late in the summer of 2018, but by this time the CME was trading in significantly higher volume."

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