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Cboe to stop listing bitcoin futures as interest in crypto trading cools

Key Points
  • The first U.S. exchange to introduce bitcoin futures will stop listing that product.
  • Cboe Global Markets says it “does not currently intend” to list any additional bitcoin futures for trading but not fully close the door on crypto.
  • It's still "assessing" its approach for how it plans to continue.
  • Retail interest in cryptocurrency trading has largely dried up since the 2017 mania.
A trader works in S&P 500 stock index options pit at the Chicago Board Options Exchange (CBOE) in Chicago, Illinois.
Jim Young | Bloomberg | Getty Images

The major U.S. exchange company that paved the way for bitcoin futures has had a change of heart.

Cboe Global Markets, which rolled out the first bitcoin futures contracts in December 2017, has decided to stop adding new ones. In a statement last week, the Cboe Futures Exchange said it will not add new bitcoin futures in March. It did not rule out the possibility of other cryptocurrency derivatives, though, and "is assessing" its approach for how it plans to continue.

In the meantime, active bitcoin contracts are still available to trade, but the last of them expires in June.

Futures are a way for investors to bet on whether the price of a commodity — in this case bitcoin — will rise or fall. The contracts expire each month, meaning an exchange has to continuously list more if it wants to keep the market alive.

The move by Cboe highlights cooling enthusiasm for bitcoin after an all-out mania led by retail investors in 2017. When the "XBT" futures launched in December of that year, bitcoin was trading near $17,000. Not long after, it shot to almost $20,000. Prices have come crashing down by 80 percent since. Bitcoin was trading near $4,000 as of Monday afternoon.

Cboe was not the only exchange to try to capitalize on the bitcoin frenzy. Its Chicago-based rival CME Group debuted its own cash-settled bitcoin contracts, also denominated in U.S. dollars, and has not announced any changes. CME's version has historically seen more trading volume. CME bitcoin futures' 30-day average volume is more than four times larger than Cboe's.

When they were introduced, futures gave investors a way to buy and sell cryptocurrency in a regulated marketplace. Those in favor of it said it would be a way to usher institutional investors into the bitcoin marketplace. There has been little evidence of that happening in the form of crypto derivatives.