Cboe Digital, the cryptocurrency division of the Chicago Board of Options Exchange, is looking to introduce a new bitcoin (BTC) futures product later this month pending regulatory approval, the exchange announced on Monday.
This upcoming trading option, developed in collaboration with FTSE Russell, will be cash-settled and linked to the XBTF Index, which reflects 1/10th the value of the FTSE Bitcoin Index. The futures will settle on the final business day of each month.
Subject to regulatory green light, trading for these futures would commence on April 28.
Futures are a type of derivative where both buyer and seller agree to exchange an asset at a predetermined price and date. They are commonly used as a means to hedge and manage risks while also allowing participants to benefit from market trends.
“This launch comes at a crucial time as the demand for cryptocurrency exposure rises, with market participants increasingly searching for more capital-efficient and flexible methods to acquire and manage their exposure,” stated Catherine Clay, Global Head of Derivatives at Cboe.
In November 2023, Cboe became the first U.S. regulated exchange to facilitate both spot and leveraged derivatives trading on a unified platform after receiving permission from the CFTC to list margined bitcoin and ether (ETH) futures.