CME Chief: ‘We Need to Learn More’ before Adding New Cryptocurrency Futures
CME Group has said that it doesn’t plan to offer cryptocurrency futures other than bitcoin any time soon, arguing that it needs to ‘learn more’ about the market.
In December, the Chicago Mercantile Exchange (CME) launched its bitcoin futures contract, a week after fellow Chicago exchange Cboe stepped into the market. However, despite the heightened interest this brought to the sector, Terry Duffy, CME CEO, explained that the company is going slowly due to the unpredictability of the market, reports Bloomberg.
“I’m not going to get over my skis on something that could be potentially damaging to the reputation of the company,” Duffy said. “To say that you should just automatically go ahead and list others I think is a little irresponsible right now,” adding that ‘we need to learn more.’
Unlike CME, Cboe appears to be a bit more open-minded toward the possibility of adding additional digital currencies. Last month, Chris Concannon, Cboe’s president and chief operating officer, said during a press briefing in New York that:
“You look at the entire crypto space and you look at what other products have the liquidity and the notional size, a derivative makes sense.”
Notably, though, this won’t take place until the futures exchange begins using the software it bought from Bats Global Markets last year. The upgrade is expected to take place the 25th February.
For Duffy, however, he’s in no rush to get ahead of the game. In a separate report from the Financial Times, he said:
“It’s going to be a slow grower, which is fine.”
So far, volumes have averaged around 1,000 contracts per day, with each CME contract equal to five bitcoin. Interestingly, traders are using Cboe’s product more even though one Cboe contract represents just one bitcoin. Data compiled by Bloomberg shows that Cboe saw 7.5 times more volume during the past five days.
Due to the volatility of the market, it seems to be a good move from Duffy to hold off on adding other digital coins to CME.
The cryptocurrency market is continuing to drop in price amid market uncertainty with values across the board in a sea of red. Bitcoin has fallen to $8,217, representing a 14.28 percent decrease in 24 hours, according to CoinMarketCap. Ethereum isn’t faring any better and has once again slipped below $1,000, at $855, over 23 percent lower than yesterday. Whereas, third placed ripple saw a near 30 percent drop over a 24-hour period.