The new FTSE Bitcoin Index Futures (Ticker: XBTF) have launched for trading by the Chicago Board Options Exchange (CBOE). XBTF futures contracts are cash-settled and based on the FTSE Bitcoin Reduced Value Index. This measures the price of Bitcoin in US dollars at a tenth of the entire FTSE Bitcoin Index’s value.
With the reduced contract size, a greater number of traders and institutions will be able to use the product. This would enable risk management, hedging, and tactical trading, eliminating the need for physical Bitcoin transfer on contract expiration.
The London Stock Exchange Group’s index division, FTSE Russell, and CBOE collaborated to establish the product.
Shawn Creighton, director of index derivatives solutions at FTSE Russell, emphasized the rigorous vetting and monitoring process behind the index, stating,
“We have established an industry standard for assessing digital assets. Our vetting and monitoring process ensures that indices reflect the investable digital assets market.”
CBOE’s Global Head of Derivatives, Catherine Clay, highlighted the significance of this addition:
“This launch comes at a pivotal time as demand for crypto exposure continues to grow and market participants are increasingly seeking more capital-efficient and versatile ways to gain and manage that exposure.”
CBOE XBTF Enhancing Bitcoin Product Ecosystem
In addition to the recently introduced cash-settled options on the CBOE Bitcoin U.S. ETF Index (CBTX and MBTX), the introduction of XBTF futures rounds out CBOE’s growing line of Bitcoin-related products. These products offer a more complete set of tools for performing sophisticated trading techniques, controlling risk, and voicing opinions about Bitcoin.
Hedge funds, institutional asset managers, and proprietary trading organizations could benefit from the new futures contracts. For example, they can use these tools to gain direct exposure to Bitcoin in a regulated setting, manage portfolio risk, or hedge volatility.
By providing a regulated, accessible, and cash-settled futures product, CBOE is meeting the increasing demand from institutional and retail investors for advanced tools to control their exposure to Bitcoin.
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