The two will come after launching of the products by CBOE last Saturday and are expected to boost retail participation and liquidity. They will certainly increase production volumes and dollar value of trading. The volume in the CBOE contract was very small at roughly $60 million in notional value trading each day.
In fact, even as these products targeted at improving volatility. Thus it hasn’t been as high this week as it was in previous weeks. After the introduction of the futures by CBOE. Earlier the market reported a 5 percent spread between cash contract. And also the futures but that narrowed to about 1.5 percent.
Bitcoin futures products are considering as improving respectability of Bitcoin and other cryptocurrencies. However, one problem is a low volume of a transaction at CBOE market. Along with only a half-million Bitcoins changing hands in the last 24 hours or about $8.5 billion in value.
“The largest traders of bitcoin are retail players that don’t live in the U.S.,” Bobby Cho, a trader at Cumberland Mining, a subsidiary of DRW told CNBC. He says the largest miners in the world are also outside U.S.A and that they are not built to trade financial instruments but to mine Bitcoin.
Natural hedgers who want to short Bitcoin as a hedge also need functionality. They need to be able to get in and out of their positions easily. Most large broker houses do not allow customers to trade, and if they allow, it is under very strict conditions, for instance in Interactive Brokers where the margins are high at 50 percent.
It is possible that larger institutional players will enter the market as large firms such as JPMorgan and Morgan Stanley start allowing their customers to trade — they may have a very different notion of Bitcoin futures.
CBOE reported that the trading went as planned after the debut. The product also caused Bitcoin prices to go up beyond $17,000.