First Day of CBOE Futures Off to a Bang

The first day of bitcoin traded futures on the CBOE has almost come and gone, with many interesting things happening in only 24 hours. The CBOE, (Chicago Board Options Exchange) is the first of two futures markets to be launched on what many would consider “traditional Wall Street , this month. Arguably the bigger one and the second, will be the CME (Chicago Mercantile Exchange) which will launch on the 18th. If you want to check the CBOE futures price you can simply just google XBT.1

Both the futures on CBOE and CME will settle in cash, which means they arent actually touching the baseline assets. However the more important reason for the futures is they set a price point that can be used as a reference for something like an ETF. I personally like the idea of an ETF because I see many people getting into the space because they want the returns and end up losing their keys and dont realize they cant get it back. Having an easier route for the public who isnt as tech savvy isnt terrible in my opinion.

The biggest worry so far is that Wall Street can manipulate the price, which it might be able to do, but many are very weary in doing so because overall, they arent the big players in this market. We saw someone try to short the crap out of bitcoin the second the CBOE futures launched and ultimately they got margin called and lost a ton of money. Many traders dont want to risk trying to manipulate such a volatile market, although some might.

The CBOE and CME exchanges also have a few safety nets put in place because bitcoin can be such a volatile market. If there is a price rise or change over a certain percentage (Its relatively small like 7%)
The market will freeze for a small amount of time. Within the last 24 hours, the CBOE futures were frozen twice. Its only momentarily but it is made to hopefully cut down on manipulation of a lower liquidity futures market.

Overall the first day of the CBOE futures was a huge success. We see exchanges start to move towards the futures price (which is what happens with almost all assets with futures) and there also seems to be arbitrage happening between exchanges. Last week the gaps between the various exchanges were in the thousands, now they are in the few hundreds. Millions of dollars of volume was traded in the first day and it will likely only ramp up in the coming weeks. The CME futures will launch in a week and that should only further the process. Which way the price moves aside, the evolution of bitcoin futures will be very interesting.