December 2017, when crypto currency fever was at its highest peak, traders eagerly waited for new coin on their computers to witness an entirely new trend in crypto assets. Bitcoin Futures start started trading on CBoe Global Market’s exchange at 5 PM. Future was a completely new idea. It let the investors bet on the price without having the need to buying the digital asset in real. Everyone seemed excited about the new concept and hoped that contracts would help bring Bitcoin trading into financial mainstream which led to many huge investments at that time.
After few months of its launch, the price experienced a surge about 600 percent in early August. Cboe and CME rolled its own version in mid Dec which couldn’t compete Bitcoin with ever high $20,000 and lost more than half of its value. Investors were expecting thousands of contracts per day but this wasn’t what happened. Ten months fast forward, Cboe and CME traded over 9,000 contracts per day in the third Quarter. Experts suggest that as long as institutional players stay on Bitcoin sidelines, there won’t be any possibility for substantial volume for Bitcoin Futures.
For second quarter, CME sold about 3500 contracts daily on the average. The third quarter started from around 5000. Around 18 million contracts were sold in the Q2 on products tied to everything from oil and gold to interest rates. Although there are not any huge flows yet. According to Cboe CEO “it’s a little bit shocking to me the attention this market gets versus its size. There has been more articles than volume”. He further added, the entire crypto market is a fifth of Apple. Apple Inc.’s market value is more than $1 trillion, compare to $210 billion for all the crypto currencies.
Bitcoin futures have slow growth rate but it is still surviving despite large institutional investors are not investing in futures anymore. VIX futures which Cboe introduced back in 2005 allow traders to bet on the volatility of the stock market. It took a long time to see any success for the Vix futures. Average volume didn’t reach 10,000 until 2010. The exchange is planning to launch Either future.