Cboe is seeking lower bitcoin futures prices
The exchange is working to reduce US dollar bitcoin futures minimums from 10 points ($10) to 5 points ($5).
Cboe Futures Exchange (CFE) has petitioned the Commodity Futures Trading Commission (CFTC) to lower the minimum buy and sell prices of its futures contracts, just a few months after officially launching the products.
In a letter to the CFTC dated April 17, CFE managing director Matthew McFarland submitted an amendment to “change the minimum increment” for US dollar bitcoin (XBT) futures from 10 points ($10) to 5 points ($5).
There are different minimum increments for XBT futures for the individual legs and net prices of spread trades. McFarland said that the proposed increments would only affect single leg transactions (one contract) and not spread trades (which require the purchase and sale of two different contracts).
CFE believes that the amendment will contribute to a competitive, open, and efficient market and mechanism for executing transactions that protects the price discovery process for trading in XBT futures in CFE’s centralized market.
CFE managing director Matthew McFarland on proposed futures contract changes
“CFE will continue to evaluate its experience with the trading in XBT futures and may determine to make future changes relating to XBT futures in light of that experience,” McFarland said in the letter.
Cboe, the largest US options exchange, began trading bitcoin futures in mid-December last year. About one week later, Chicago Mercantile Exchange (CME), started offering futures contracts to prospective investors.
Late last month, Cboe urged the Securities and Exchange Commission (SEC) to permit the advancement of cryptocurrency exchange-traded funds (ETFs) in the same way that commodity-related products are allowed.
Long-term future pricing options has been touted as a vote of confidence for the virtual currency economy, potentially paving the way for less market volatility and further increased investment over time.
New data released this week shows cryptocurrency funds have suffered a significant fall from grace since the beginning of the year, highlighting the extremely speculative and volatile nature of these unseasoned assets. The statistics reveal that in January 2018 cryptocurrency funds lost 11.63%. In February, the funds fell further, down 9.04%. March saw the worst declines, as the digital currency funds slipped again, tumbling by 29.15%.
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