CME does not intend to launch physical settlement of bitcoin futures

Tim McCourt, head of global stock index at the Chicago Mercantile Exchange (CME), said in an interview with Markets Media that bitcoin futures for physical settlement are not currently considered by CME.


According to U.Today, the agency is increasingly interested in Bitcoin, and the much-anticipated physical settlement of Bitcoin futures was launched on the Bakkt exchange on September 23. But in the first week after its launch, the AK-backed Bakkt exchange traded just $5 million and traded only 623 months of bitcoin futures contracts.

In contrast, just one day last Friday, CME traded 40,000 bitcoin futures contracts, with daily trading volume reaching $165 million. Since its inception, CME has had 20 successful futures settlements and more than 3,300 individual accounts have been traded. So far, there are an average of nearly 7,000 CME bitcoin futures contracts (equivalent to about 35,000 bitcoins) per day.

Bakkt's new product cold may explain why CME does not intend to enter the physical settlement of the bitcoin futures market in the short term. McCourt believes that institutions such as hedge funds and asset management companies are increasingly keen to invest in bitcoin. However, they are not yet ready to enter areas that have not been tested repeatedly. He mentioned that

“Institutions’ interest in Bitcoin is growing, but they need time to get familiar with the market and get permission to use new products.”

Just two weeks ago, CME announced that it would launch Bitcoin futures contract options in the first quarter of 2020, which is awaiting regulatory approval.

“Based on the growth in customer demand and the strong growth of our bitcoin futures market, we believe that the introduction of options will provide our customers with additional trading flexibility and hedge their bitcoin price risk,” said Tim McCourt. “These new products Designed to help institutional and professional traders manage bitcoin risk in the spot market and hedge against bitcoin futures in a regulated trading environment."

By Xiu MU

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Disclaimer: It is only the author's point of view and does not constitute investment advice. Investment is risky and at your own risk.