Cboe® Launches FTSE Bitcoin Index Futures, Broadening Bitcoin Derivatives Ecosystem

The growing securitization of digital assets in recent years has paved the path for continued innovation within the asset class. Recently, Cboe Global Markets, Inc. CBOE, the world’s leading derivatives and securities exchange network, launched Cboe FTSE Bitcoin Index Futures (XBTF), cash-settled futures contracts based on the FTSE Bitcoin Reduced Value Index. With the increasing adoption of digital assets by both institutional and retail investors, the creation of crypto-based derivatives, such as Cboe's FTSE Bitcoin Index Futures, enables a more fulsome investment ecosystem, allowing market participants to manage their Bitcoin exposure more comprehensively.

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Cboe FTSE Bitcoin Index Futures Explained

Cboe FTSE Bitcoin Index Futures can be an efficient way for investors to gain exposure to Bitcoin, as the futures contracts are based on the FTSE Bitcoin Reduced Value Index, which represents one-tenth (i.e., 1/10) the value of the FTSE Bitcoin Index. The FTSE Bitcoin Index reflects the settlement price of Bitcoin as determined by the FTSE DAR Reference Price.

The cash-settled nature of this new investment solution is a primary benefit, as it facilitates capital efficiency, eliminating the complexity of physical bitcoin delivery. From an investment management standpoint, XBTF can be utilized to mitigate volatility and adverse price movements from various Bitcoin exposures, including Bitcoin, Bitcoin ETFs, Bitcoin ETF options and other Bitcoin futures. It is important to note that the futures are cleared through The Options Clearing Corporation (OCC), providing a trusted market and reducing counterparty risk.

Cboe's Growing Digital Assets Ecosystem

The launch of XBTF expands Cboe's complementary suite of Bitcoin-related index derivatives products including Cboe's Bitcoin  ETF Index Options (CBTX) and Mini Bitcoin  ETF Index Options (MBTX). These index options instruments are the first Securities and Exchange Commission (SEC) cash-settled index options tied to spot Bitcoin. Both indices track the underlying basket of spot Bitcoin ETFs. The suite of Cboe's Bitcoin derivative offerings can be useful for managing Bitcoin volatility without physically holding Bitcoin, and can be used alone or in tandem to execute more advanced trading strategies.

Participating In The Bitcoin Growth Story With Cboe

Bitcoin and other digital assets are increasingly finding a place in many investors' portfolios. Traders and investors can utilize the derivative Bitcoin investment offerings designed by Cboe to efficiently gain desired exposure to the digital asset, implementing strategies such as volatility arbitrage or hedging portfolio risk.

Click here to learn more about this latest offering from Cboe.

It is important to remember that responsible trading requires defining an investment objective and using analysis and informed decision-making to determine the most appropriate trading tool and strategy. Understanding how your chosen instrument works and the associated risks, is paramount. 

Featured image by André François McKenzie on Unsplash.

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