Sun. Aug 7th, 2022

On Monday, the 13th of January 2020, the Chicago Mercantile Exchange (CME) launched its Bitcoin futures options on the CME Globex, after receiving the required regulatory approval. Competing with ICE’s (Intercontinental Exchange) Bakkt,which launched its own options and cash-settled contracts in December 2019, CME surpassed Bakkt’s total reported BTC option volumes in only one day.

CME Bitcoin Futures Options Go Live

After launching yesterday, the CME also made a company announcementregarding their launch of the futures options, a new type of Bitcoin derivatives contract, which was in line with their plans made three months ago. This comes after the CME received regulatory approval before making the asset class available to investors.

CME is a popular name within the cryptocurrency space as it was one of the first exchanges to host the Bitcoin futures contracts, alongside the Chicago Board Options Exchange (CBOE) over two years ago. The company first announced their plans to launch the Bitcoin futures options on the 12th of November last year, and three months later, the product has gone live.

According to the company, the launch of the Bitcoin futures options was as a result of the growing interest in crypto assets. In addition, crypto customers have been demanding more tools in order to manage their Bitcoin exposure. To put it into perspective, last week, Bitcoin futures traders generated over $20 billion in daily volume.  According to analyst Skew Markets,that provide aggregated volume data for Bitcoin futures products, on the 8th of January alone, the global futures trading volume exceeded $20 billion.

CME Joins Bakkt and FTX in the Bitcoin Futures Options Market

The entry of CME into the Bitcoin futures options market means that there are now three companies that currently provide options on Bitcoin futures to investors. ICE-backed Bakkt was the first exchange to launch the BTC options in the U.S. The CME was beaten to second place by cryptocurrency derivatives exchange FTX, who launched its Bitcoin options trading on the 11th of January this year.

The presence of CME alongside FTX and Bakkt will now give investors more choices in the long run. To top it off, with the market growing, it won’t be surprising if more exchanges venture into the Bitcoin futures options market.To understand the enormity of this market, according to estimates, as of October 2019, the crypto futures trading volume amounted to almost 50% of the value of spot trading on crypto markets.

CME Surpasses Bakkt

Although CME is the new entrant in the Bitcoin futures options market, it has already surpassed Bakkt in terms of the reported trading volume. On the first day, the CME traded 55 contracts, which is worth around 275 BTC or $2.1 million. This figure trumps the $1.15 million traded on Bakkt since its launch on December 9.

These figures could indicate that CME is the preferred choice by a lot of investors over Bakkt and could lead the market over the coming months. Tim McCourt, managing director at CME Group, was satisfied with the first-day performance and was happy with the feedback from market participants. McCourt stated that, “In terms of their ability to quote the market, consume the data, all technical aspects; everything worked as designed.”

The Bitcoin futures options market is barely two months old, and it is likely anyone’s game to lead at this point. However, CME looks like a strong option to give the market the competition it needs.