[2018-03-01] CBOE Completes Upgrade, Other Crypto Futures Coming?

[cybersofts]

CBOE Completes Upgrade, Other Crypto Futures Coming?




When the Commodity Futures and Trading Commission announced that two major exchanges could begin to offer bitcoin futures to investors, people in the crypto community heralded it as a triumphant day.

This decision was announced on December 1, 2017, and the price of Bitcoin rose 13% on this news. It was seen as a significant move into more mainstream finance for cryptocurrencies. For the first time, they were being acknowledged in a significant way by a leading government agency.

Both CBOE Global Markets Inc and CME Group were given the go-ahead to start offering these futures, which allow institutional investors to get involved with bitcoin in a much easier and more significant manner.

While the performance of these futures to date has been mixed due to volatile bitcoin prices since the turn of the year, it now appears that other cryptocurrencies will soon have their own futures contracts available for trade.


The Rumors

CBOE Global Markets Inc made a statement on Tuesday informing the public that they have completed a technology upgrade for their futures exchange over this past weekend.

On January 17 the company’s President Chris Concannon admitted that it is a sensible idea to eventually have derivatives for a variety of digital currencies, but his company’s exchange would not be in a position to launch these futures until their system’s software had been updated. Now that this has been completed, there is nothing standing in their way of a variety of instruments on the entire spectrum of cryptocurrencies.


First Cryptocurrencies in Line?

While Concannon did not go into detail about what cryptocurrencies CBOE would be focusing on initially, there has been a lot of speculation doing the rounds in the crypto community.

Bitcoin currently sits at the top of the crypto mountain with $178 billion worth being in circulation. There are an additional four digital currencies that exceed a market cap of $10 billion and they are Ethereum, Ripple, Bitcoin Cash and Litecoin.

It would make sense that one or more of these higher market cap tokens would be high on the list of priorities for a derivate launch by CBOE.


The Upgrades

There was significant work done on the CBOE Futures Exchange, including a latency reduction exceeding 80%. Transaction speed is extremely important for traders as a delay of even a couple seconds can have dramatic effects on the outcome of a trade.

They have also made improvements to the order-by-order data feed, bandwidth thresholds, self-trade prevention, risk controls and complex spread order handling.

People are wondering if CBOE’s competitor with bitcoin futures, CME Group will be following their lead and looking to launch futures for other cryptocurrencies. The CME Group seems to be taking a more cautious approach to expansion and will most likely watch to see what happens with CBOE’s new offerings to see how they perform before making a firm decision.


Source: https://www.ccn.com/cboe-completes-upgrade-other-crypto-futures-coming/

[BitHodler]

It's meaningless, and more people start to understand that. It's clear that we don't have to even bother getting interested in these news articles, because it doesn't contribute anything to Bitcoin or crypto in its entirety.

At first the market was hyped up to such an extent, that it even resulted in the all time high of nearly $20,000 back in December. It would allow institutional investors to enter this market, at least, that's what people thought.

Aside from the price that's pegged to Bitcoin, these futures have ZERO connections with Bitcoin itself. From there I am actually glad that the futures don't affect this market, because it just doesn't make any sense.

[Lancusters]

I don't understand what the transaction confirmation rate has to do with futures trading. This type of transactions does not require the transfer of bitcoins online. I also want to address the issue of speed of transactions has been resolved. But I'm interested because I want to see bitcoin as a currency.

[FrueGreads]

It's meaningless, and more people start to understand that. It's clear that we don't have to even bother getting interested in these news articles, because it doesn't contribute anything to Bitcoin or crypto in its entirety.

At first the market was hyped up to such an extent, that it even resulted in the all time high of nearly $20,000 back in December. It would allow institutional investors to enter this market, at least, that's what people thought.

Aside from the price that's pegged to Bitcoin, these futures have ZERO connections with Bitcoin itself. From there I am actually glad that the futures don't affect this market, because it just doesn't make any sense.

I'm not sure if the bitcoin price was directly affected by futures trading or not. Well, it definetely was affected, as we see it's price increasing based on those news, but no one knows if this was done by institutional investors coming in to the market or not. It's said they maybe that price increase was actually done by them, because they also bought bitcoin, so that the price would increase, and then they used the bitcoins they've bought to manipulate the market and bring it's price down, in order to have profit by shorting bitcoin.

No one know if that is true or not, but it was possible. Bitcoin has a very thin market, so it's easy for these guys to play with it, until we get real adoption. As for the new futures being listed, I think it will probably happen, specially because things went well with the first product, so they will probably do it again.

[TheQuin]

There was significant work done on the CBOE Futures Exchange, including a latency reduction exceeding 80%. Transaction speed is extremely important for traders as a delay of even a couple seconds can have dramatic effects on the outcome of a trade.

This looks like a piece of bad journalism in that they have linked two unrelated things. There are rumours that now there are BTC futures then ETH and others may be introduced as well. But the upgrade clearly has nothing to do with that and is just being used as an excuse to print a story.

When the exchange launches another contract it involves putting in new servers not upgrading the existing ones. The reasons for the upgrade are clearly stated in the story and nothing to do with new contracts.

[placergold]

It's weird that there are futures trading, but no ETF of the bitcoin, hope the ETFs will come soon.

[TheQuin]

It's weird that there are futures trading, but no ETF of the bitcoin, hope the ETFs will come soon.

It's not really that weird. Futures are mainly traded by professionals whereas ETFs are often held by retail investors so they are very different products with different markets. The regulatory bodies take a view on the need to protect these groups from risk based on their different levels of experience and knowledge.

I think ETFs will happen eventually but the Bitcoin market will have to mature a lot and become less volatile first.
 

[1Referee]

Aside from the price that's pegged to Bitcoin, these futures have ZERO connections with Bitcoin itself.

Correct. That's exactly why I am also not that excited about ETF's that might or might not show up this year. It's time for actual coin backed funds to make their appearance. If we have even a few large hedgefunds or financial institutions willing to set up such funds, which I believe is just a matter of time, the number of available on-market coins will dry out even further. Can you imagine that? Currently the availability of on-market coins is already at an all time low due to the high overall demand, and that number will only go lower and lower. In certain countries as we have seen, the coin availability is so low, that their market is trading at 25-50% premiums over the western market. Granted, economical difficulties making people jump into Bitcoin as safe haven hedge is a significant contributor as well. In that specific case, people will buy at any price in order to free themselves from their system.

[J-N]

I remember that when the price of Bitcoin was maximal in the December 2017, there were rumors that Litecoin and Ethereum will be listed by CBOE and CME Group. The price of those crypto-currencies jumped up in a short period, but those rumors stayed being fake.

[richardsNY]

I think ETFs will happen eventually but the Bitcoin market will have to mature a lot and become less volatile first.

ETF's are nothing more than price trackers, really. It makes no difference that the market becomes stable or not. It's just that the SEC needs to stop acting like a complete hypocrite and allow this market to develop naturally. Everything tethering the price of Bitcoin or other coins has a certain level of risk involved, nothing will be able to change that in the coming years. If volatility was a real concern, the future markets wouldn't even be allowed to operate. On top of that, platforms such as CBOE and CME have various security triggers in place to halt the market at the time Bitcoin's swings become too wild -- on the first day CBOE halted trading several times.  

[bbc.reporter]

Read this.

There are an additional four digital currencies that exceed a market cap of $10 billion and they are Ethereum, Ripple, Bitcoin Cash and Litecoin.

Wow, 2 altcoins mentioned are bitcoin fork scams and the other 2 are, to an extent, centalized scams. Maybe someone in the CBOE should hire someone well informed about the cryptospace before listing and legitimizing the wrong coins.

Using and believing in the wrong coins could be dangerous.

[CryptoBry]

It's meaningless, and more people start to understand that. It's clear that we don't have to even bother getting interested in these news articles, because it doesn't contribute anything to Bitcoin or crypto in its entirety. At first the market was hyped up to such an extent, that it even resulted in the all time high of nearly $20,000 back in December. It would allow institutional investors to enter this market, at least, that's what people thought. Aside from the price that's pegged to Bitcoin, these futures have ZERO connections with Bitcoin itself. From there I am actually glad that the futures don't affect this market, because it just doesn't make any sense.

I understand your contention. Money that are going to these futures contracts are not actually going to the Bitcoin or cryptocurrency ecosystem. This is more of a gambling (just my opinion) and they are just using Bitcoin as the basis for such a financial product. The only positive thing this can contribute is that this has become a sort of a recognition from the Wall Street on Bitcoin and its ability but these people actually don't care about Bitcoin. Just like what you said, the connection is ZERO though it became a good topic for press release and more hypes.

[TheQuin]

I think ETFs will happen eventually but the Bitcoin market will have to mature a lot and become less volatile first.

ETF's are nothing more than price trackers, really. It makes no difference that the market becomes stable or not. It's just that the SEC needs to stop acting like a complete hypocrite and allow this market to develop naturally. Everything tethering the price of Bitcoin or other coins has a certain level of risk involved, nothing will be able to change that in the coming years. If volatility was a real concern, the future markets wouldn't even be allowed to operate. On top of that, platforms such as CBOE and CME have various security triggers in place to halt the market at the time Bitcoin's swings become too wild -- on the first day CBOE halted trading several times.  

You snipped out the answer.

Futures are mainly traded by professionals whereas ETFs are often held by retail investors so they are very different products with different markets.

The market circuit breakers are in place to help reduce the impact of flash crashes that can be instigated by fat finger errors triggering algorithmic trading systems. Without the circuit breakers, the algos can run wild and make things much worse. This is about volatility that occurs in minutes or seconds.

The volatility the SEC is concerned about on ETFs is that occurs over days and weeks that will affect your average retail investor who has sunk their life savings into a fund and only checks the statement once a month.
They think it is stable enough to be a trading product, but not yet stable enough to be an investment vehicle.

BTW ETF's are a lot more than just a price tracker as they have to be backed by something, either actual Bitcoins or futures contracts.

https://i.snag.gy/Qzf8D1.jpg

Src: http://www.etf.com/sections/features-and-news/bitcoin-etf-could-launch-6-months?nopaging=1