After eighteen eight settlements, what did Cboe futures do for Bitcoin?

Cboe, which is the first to introduce bitcoin futures, is also the first to take its own futures contract XBT into history.

In the face of the first contract launched by a large futures exchange, including MacroCryptoRevo and BitPay co-founder Tony Gallippi, this is a major positive for the spot market. Lowstrife tells us that futures downline will help to reduce the behavior of white gloves such as operating spot prices, while Tony said that Cboe's bitcoin futures may usher in the next bull market after the end of June.

Screenshot from: Twitter of BitPay co-founder Tony Gallippi

Whether the bull market will come, we are not aware of it; but whether Cboe Bitcoin futures have had an impact on BTC prices since its launch, there are still traces to follow.

Announced that it will skyrocket and go online

At the end of 2017, the price of bitcoin was pushed up by madness and broke through the $20,000 mark in one fell swoop. In the process, the launch of Cboe Bitcoin futures also had a credit.

Screenshot from: Coinmarketcap

From December 1st, US regulatory authorities allowed Bitcoin futures to start trading in CME and Cboe. Bitcoin ushered in a sharp rise in the past few days. From the eve of the Cboe futures on the 8th of the month, the BTC price has approached $19,000, with a cumulative increase of over 80%. On the day when Bitcoin Futures opened trading, the market sentiment was even higher. The contract transaction also triggered the fuse mechanism multiple times because the BTC price continued to soar.

Of course, this upward trend did not last long. The price of bitcoin immediately plunged and fell on the second day after the futures contract was launched, and the decline was enough to trigger the fuse mechanism. Although the CME bitcoin futures are about to go online in the next week, the BTC price has ushered in two rounds of inflation; but, similarly, after the official opening of the futures contract, the bitcoin U-turn has re-emerged.

The plot of the rush to make the bitcoin futures of the two major exchanges of Cboe and CME bear the nickname of "bull killer" . Creditworthy technical analyst Steven pointed out that the futures market is the chief culprit of the current slaughter (bitcoin price plunged in late December 17th). "After the futures market, Bitcoin will fall, there are many digital currency holdings. All have to bear the risk, because it is almost inevitable that futures traders will be short." In addition, near the Cboe futures settlement date, Lite Capital founder Li Qiwei also expressed concerns about the delivery date. For him, Cboe Bitcoin futures trading volume is extremely low and based on the bitcoin transaction price of the Gemini trading platform, which makes the futures contract easy to be manipulated by funds; for this reason he will be very cautiously involved before and after the delivery date. transaction.

Looking back at the price movement of Bitcoin around January 17, 2018, it is true that as Li Qiwei said, the spot price has experienced significant fluctuations. On the day before the settlement date, Bitcoin fell in a cliff-like manner, recording a 17% decline on a single day; however, the decline trend began to slow down on the settlement date, and began to rebound in the following four days. What's more interesting is that before and after the CME settlement date, Bitcoin prices also experienced similar operations that went up and down again.

Screenshot from: Coinmarketcap

The abnormal fluctuations of the two major futures before and after the first settlement date left a deep impression on the market; for this reason, the community's discussion on the "delivery day effect" gradually increased.

The long and short game continues, "delivery day effect"?

In fact, the near-delivery and increased volatility are already the consensus of traders. Because it is about to reach the contract delivery date, the long and short parties involved in futures trading will fight for their own favorable contract delivery price, and will release the self-interested news at the last minute, use strong financial strength to force the opponent to lose huge losses, etc. Even the spot price exerts an influence and makes itself profitable. Speaking of this, it is worth mentioning that in September last year, the cryptocurrency exchange Kraken had questioned the US Attorney General’s Office in New York on Twitter, saying that it issued the “Virtual Market Integrity Activity Report” before the settlement of the Cboe futures contract. Suspicion of the transaction.

Screenshot from: Official tweet of cryptocurrency exchange Kraken

It is true that Bitcoin prices have a significant price amplitude around the settlement date of the first few months of Cboe Futures; however, as shown below, the correlation between Cboe Bitcoin futures maturity and the spot market over time Has gradually subsided .

The red circle is the delivery time point of the Cboe Bitcoin futures contract from January last year to May this year.

(screenshot from: Coinmarketcap)

From the specific data, before the settlement date of the Cboe futures contract in February and March 2018, Bitcoin showed a price increase of more than 10%; before and after the March contract was delivered, the price of the first drop and then rose as in January. The trend, while the price of bitcoin during the February contract delivery rose sharply, the cumulative increase in the week of delivery was 20%. However, since April last year, the trend of increased volatility on this delivery day has gradually weakened, and sometimes there have been cases of direct sideways, such as BTC prices during the futures delivery in October last year, February and March of this year. The daily increase or decrease does not exceed 1%.

Data from: Coinmarketcap

Of course, there will occasionally be a price increase of more than 5% during the subsequent futures settlement date; but it is not difficult to see from the history that the price fluctuations in the relevant time period are largely not only affected by the delivery of Cboe futures. Take the November futures contract settlement date as an example. Although the bitcoin price has dropped nearly 10% before the delivery, the incentive for the price decline in the middle of the month is more the chain effect brought by the BCH calculation battle; The price increase was affected by Bakkt’s announcement of the plan to advance the physical settlement of Bitcoin futures contracts.

Going back to the recent discussion about Cobe stopping Bitcoin futures, we can easily find the reason. Compared to CME and BitMEX, Cboe's bitcoin futures trading volume is too small. According to TradeBlock's data, Cboe's bitcoin futures trading volume has continued to decline sharply since last year; in recent months, it has even hit new lows. Therefore, many people on Reddit and Twitter believe that the small scale of Cboe futures trading, even if it is offline, will not have much impact on market volume and even bitcoin price; then the market reaction brought by its settlement date will be even more Needless to say.

Dark blue is CME bitcoin futures trading volume; light blue is Cboe bitcoin futures trading volume

(Image courtesy of TradeBlock)

Moreover, Cboe's bitcoin futures are inherently insufficient. The contract unit is 1BTC, only 3 recent monthly contracts, and 44% initial margin is required. There is no design for CME futures contracts (CME futures contracts are 5) The BTC is a unit with a four-month contract that requires 35% initial margin, or about 3 times leverage. Compared with Cboe, CME is more favored by institutional investors; smaller Cboe contracts are more of a choice for small investors. In order to improve their competitiveness, Cboe relaxed trading rules and set new pricing methods last year, but failed to attract more investors; in the last few months, Cboe bitcoin futures trading volume is even less than one tenth of CME. .

As for today, it is the last settlement of Cboe Bitcoin futures XBT. From the current point of view, the market has still not given much reaction. In recent days, BTC prices have remained in a sideways state, with intraday fluctuations of no more than 4%; At the same time as bidding farewell to XBT, we can also announce that the Cboe delivery date effect has officially lapsed .

(Article from: Hash school; Author: LucyCheng)