Cboe plans to re-enter cryptocurrency market with new products

According to Bloomberg, Cboe Global Markets, the world’s leading options trading platform, is planning to re-enter the cryptocurrency derivatives market after several failed attempts.

Despite the setbacks, Cboe insists that it has not given up on the cryptocurrency space and remains interested in developing cryptocurrency-based products, especially now that demand for such products is rising. CEO Ed Tilly said:

“We are still interested in this space and we have not given up. We are eager to build the entire platform. There is a lot of demand from both retail and institutional and we need to be in this space.”

Especially since the second half of 2020, the strong interest in cryptocurrencies has increased investment in the cryptocurrency market, especially from institutional investors. Top entrepreneurs like Elon Musk, Jack Dorsey, Michael Saylor, etc. have invested a considerable portion of their company's shares in Bitcoin as an effective reserve asset.

The Chicago Board Options Exchange (Cboe) and the Chicago Mercantile Exchange (CME) are the world's largest derivatives markets. But unlike Cboe, CME has achieved greater success in the crypto market as the largest futures trading exchange for Bitcoin and Ethereum.

Additionally, Cboe was the first U.S. exchange to launch Bitcoin futures in December 2017, with its last Bitcoin futures contract settled in June 2019. After a first failed attempt, it was announced in December 2020 that Cboe would re-list Bitcoin futures in the second quarter of 2020.

In September 2019, Cboe withdrew a proposal submitted to the SEC under its BZX exchange to list and trade shares of Vaneck SolidX Bitcoin Trust. However, the exchange resubmitted its application earlier in March 2021 and is currently awaiting approval from the SEC.

Tilly added: “We are very hopeful that the VanEck ETF will be approved.”

In mid-December 2020, Cboe partnered with crypto market data provider CoinRoutes, gaining access to CoinRoutes’ library to create data, indexes and analytical products. CoinRoutes is a New York-based trading software company that provides a range of algorithmic trading tools for digital assets, foreign exchange and derivatives.

The company has an innovative trademarked product, RealPriceTM, which is patent pending and uses the collective Best-Bid-Offer of all top crypto exchanges.

Cboe expects to make select RealPrice data available on its CSMI cryptocurrency channel by the end of the first quarter of 2021.

This marks Cboe’s official foray into the crypto data business, which the exchange has pledged to leverage by the end of the first quarter of 2020. The two companies aim to increase transparency in crypto assets by using RealPrice data. The goal is to create trading products and information that attract new investors by helping them understand cryptocurrency concepts and encouraging them to participate in the market.