Main Differences Between CBOE and CME Bitcoin Futures

Rate this post

During the last weeks we have been reading and hearing about Bitcoin Futures. More specifically about the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME). Let’s see which are the differences between these two options exchange and the possible effects in the cryptocurrency market.

How Does the CBOE Work?

The Chicago Board Options Exchange opened yesterday at 6PM (CST) offering to their customers the possibility to trade Bitcoin Futures. The exchange offers Bitcoin contracts settled in US Dollars, that means that no Bitcoin is involved in the transaction. An investor buys one Bitcoin Contract with dollars, and then it receives the dollars at the rate expressed on the Gemini exchange. Each investor can buy one contract and up to 5,000.

When the CBOE opened for its customers, the Bitcoin market suffered for high volatility the first 20 minutes of trading. Bitcoin price fluctuated more than $1,000 dollars in less than 5 minutes in both directions. After the first minutes, the market stabilized and operated stable.

How Does the CME Work?

The Chicago Mercantile Exchange is more important than the CBOE. Because of this reason it is expected to move more money than the CBOE. The contract size is different than in the other options exchange. In this case the contract must be equivalent to 5 Bitcoin. In the same way as the CBOE, the CME is cash settled.

The rate that will be taken into account for the contracts will be the CME Bitcoin Reference Rate which is an average of prices from Bitstamp, GDAX, itBit and Kraken. The CME will start to operate with bitcoin futures on December the 18^th at 6PM (CST).

What Does The Market Expect From Them?

Independently from the price volatility or the changes in the market, these markets legitimize the cryptocurrency market. We have been covering during these years how different figures in the media and important bankers tried to destroy Bitcoin. Institutional Investors believed that Bitcoin was the currency of the dark web, but in the end, what they called Bitcoin, was the whole cryptocurrency market.

Once enterprises and governments analysed bitcoin, they realized that behind it there was the Blockchain. Now this technology is changing the way companies and institutions perform their transactions and process the information. There are even projects that are searching different methods for people to vote with Blockchain.

Bitcoin Futures will give liquidity to the market and more money to the cryptocurrency sphere. That means that several currencies will see a nice upward trend. Indeed, the cryptocurrency market has reacted really positively to the CBOE bitcoin futures.

The majority of the cryptocurrencies register gains in the last 24 hours with Litecoin being the one that everyone is looking at. This cryptocurrency has grown 26 percent, has reached $10.7 billion market capitalization and it is now the fifth largest cryptocurrency in the market.

What do you think about Bitcoin Futures? Do they mean good news for the cryptocurrency community?