The Chicago Board Options Exchange—the largest United States options exchange—held an earnings call yesterday that touched on the subject of cryptocurrencies and CME Group’s announcement of Bitcoin futures.
They were asked whether they could provide a timeline for their Bitcoin futures instrument but avoided providing a direct answer to the question. Alan Dean, Executive Vice President and CFO of CBOE, said that they’re waiting for regulators to give them the green light.
CME Group—an old competitor of CBOE, and the world’s largest derivative markets operator—has already announced Bitcoin futures.
CBOE’s President and COO, Chris Concannon, commented on this, saying that he is “encouraged” by the announcement since it validates their perspective that this is a direction in which they should tread.
“It's not suggesting what cryptocurrency is going to be the winner and the loser. But overall, the cryptocurrency space is the space that I think we believe in and certainly our competitor across town believes in as well. And I'm just encouraged by that validation,” he added.
Edward Tilly, CEO, considers that it is “not surprising as CME recognizes the same benefits of offering a transparent market.”
“We're really agnostic to the ultimate cryptocurrency that may survive so whether that's Ether or Bitcoin, it will be interesting. But we are not in that fight. We know right now there are customers looking for exposure in Bitcoin,” he added.
This statement by the CEO seems to foreshadow an eventual introduction of Ether futures as well on the exchange.
If they do this, it will put them one step ahead of CME Group, at least as far as futures on cryptocurrencies are concerned, since CME is currently only offering the product with regards to Bitcoin.
Eventually, they might go one step further and begin adding exchange-traded funds on cryptocurrencies as an asset category, as Concannon suggests is possible in this statement:
“Over time, we do envision ETFs coming to market once the regulated futures market is dealt and liquid so we do think the opportunity, we're encouraged by everyone's focus on this space.”
He added that he is “encouraged [about] how people are thinking about the cryptocurrency space” and its future.
In the early days of Bitcoin, it was probably unfathomable to think that financial organizations would begin offering instruments that revolve around it. Now, we’re at a point where CBOE and CME are in an arms race to provide Bitcoin futures contracts.
The battle has begun, and we’ll just have to see how it plays out as both of them rush to get their products on the table.