Editor's Note: This article comes fromNakamoto Shallot (ID: xcongapp), Author: Sister Xiaocong, published by Odaily with authorization.
Editor's Note: This article comes from
Nakamoto Shallot (ID: xcongapp)
Nakamoto Shallot (ID: xcongapp)
, Author: Sister Xiaocong, published by Odaily with authorization.
CME and Bakkt are rumored to launch bitcoin options, and OKEx and Binance are running into the game. The battle is almost set, and the smoke of gunpowder will soon begin to fill the air.
Initially, Bitcoin only had over-the-counter transactions, and later on-exchange transactions began to rise. At the end of 2017, the Bitcoin futures contract launched by the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME) made the Bitcoin derivatives market begin to prosper.
This year, the entry of Bakkt, LedgerX, ErisX and other exchanges has brought a new competitive landscape to the bitcoin contract market, and bitcoin futures with physical delivery have begun to become the mainstream. At present, Bakkt has successfully launched Bitcoin physical delivery futures, and Bakkt was once regarded by the market as "the biggest positive in 2019" and "a bull market engine". It will bring mainstream funds in a large scale and start a new round of journey.
However, derivatives providers led by CME, Bakkt, and LedgerX are not satisfied with this. They are still exploring the huge unknown potential of the Bitcoin market, and collectively turn their attention to the Bitcoin options market. The battle is almost set, and the smoke will soon begin to spread .
Although bitcoin options products have existed in the market for some time, when institutions such as CME and Bakkt, which are considered to be "bull market engines", enter the market, they may really detonate the bitcoin options market and make the bitcoin derivatives market once again Prosperity.
secondary title
CME, Bakkt's Bitcoin options may meet in the market soon
On September 23 this year, Bakkt, a Bitcoin futures platform under the Intercontinental Exchange (ICE), officially launched a physical-settled Bitcoin (BTC) futures trading platform. The impact could go from a trickle to a torrent.
However, less than a month after launching bitcoin physically delivered futures, Bakkt appears to be taking the next step.
As early as a few days ago, CME had news that it would launch bitcoin options. CME Group appears to be preparing to add another product to its line of bitcoin derivatives. Later, Bloomberg reported that CME will launch bitcoin options in the first quarter of 2020, pending regulatory review.
If all goes well, CME's Bitcoin options will be able to meet the market in a few months. According to the "South China Morning Post", CME executive Tim McCourt recently said that Asian investors and miners are expected to have huge demand for its upcoming bitcoin options. Trading volumes in bitcoin futures contracts have surged in recent times, paving the way for other derivatives to be more successful.
In addition, LedgerX, a U.S. compliant cryptocurrency exchange, has launched bitcoin options, and ErisX, an encrypted derivatives provider (backed by U.S. securities giant TD Ameritrade), which has obtained a license from the U.S. CFTC Derivatives Clearing Organization (DCO), may also Keep up with the pace of large institutions and enter the options market.
Recently, CoinGecko’s latest quarterly report on the cryptocurrency market shows that cryptocurrency derivatives have experienced explosive growth, with the number rising from 6 in early July this year to 17 in early October. Among them, Bitmex, Binance, OKEx, Kraken, Huobi, and bitFlyer are representative platforms. And, despite the bearish third quarter, derivatives exchanges performed strongly, recording significant volume spikes during periods of price volatility (late September).
secondary title
Back in November 2017, LedgerX launched its first long-traded Bitcoin Futures Options (LEAPS), priced at $10,000. In July of this year, LedgerX announced its call option again, priced at $100,000, and buyers bet that the price of Bitcoin will break through $100,000 before December 2020. For a long time, this long-term futures option has been regarded by the industry as one of the signs of industry maturity, and to some extent, it can pave the way for more institutional funds to enter the market.
LedgerX has been providing derivatives to institutional clients for the past two years, and now the company has received approval from the U.S. Commodity Futures Trading Commission (CFTC) to offer its new products to retail investors, and options are one of its attempts. In August of this year, LedgerX announced on their official Twitter that they are conducting retail transactions on Omni! Bitcoin spot and options trading is now open to everyone.
Different from CME and Bakkt, LedgerX’s options products were launched first, but its futures products have experienced twists and turns and have not yet been launched.
Recently, Cointelegraph reported that the person in charge of LedgerX said that the Omni platform they launched only has options and swap products, and there are no bitcoin futures. Juthica Chou, chief operating officer of LedgerX, said, “We have been in close contact with the CFTC. We now have three licenses, one SEF that allows us to list options and swaps, and one DCM that allows us to list options, swaps and futures (designated contract market), and a DCO license that allows us to clear options and swaps. We are waiting for the DCO amendment, and when we get the DCO amendment, LedgerX will add futures.
secondary title
Not only are traditional exchanges eyeing the Bitcoin options market, native cryptocurrency exchanges seem to be keenly aware of new trends in the market.
Today, Xu Kun, vice president of strategy at OK, said on Weibo that the derivatives market space in the traditional financial market is more than ten times that of the spot market. Like digital currencies, the future derivatives space is very high. The current contract market share is almost evenly divided between OKEx and bitmex All over the world, it is the right direction for friends to enter the derivatives market, but the road is also tortuous. We have accumulated more than 6 years of expertise and experience to support our more stable road. Options are currently under development.
Compared with CME and Bakkt, the pace of OK seems to be faster, and its option products are already under development.
In addition, on September 3 this year, Binance issued an announcement announcing the acquisition of JEX, a digital currency derivatives trading platform. JEX will join the Binance ecosystem as Binance JEX to further build the crypto asset derivatives market and provide Binance users with professional services including derivatives such as futures contracts and options.
secondary title
What are Bitcoin Options? How is it different from Bitcoin futures?
Both options and futures are derivative contracts. The option contract gives the holder the right to buy or sell an asset at a fixed price on or before a certain date; Ways to trade across time.
Futures trading is still a certain subject matter (it can be commodities/goods, such as gold, crude oil, agricultural products, or financial instruments, or Bitcoin), but it is not immediately traded, but traded at an agreed time in the future; Option trading is a right to buy and sell, but investors are not obligated to buy or sell.
SwissBorg Wealth Management summarizes Bitcoin options as, just like you think that the price of Bitcoin will rise in the future and buy Bitcoin (or think that the price will fall and sell Bitcoin), Bitcoin options still provide a price change. Arbitrage opportunities. But options do not have to actually buy (or sell) Bitcoin, but provide investors with the "right" to buy (or sell) Bitcoin at a predetermined price in the future.
There are many ways to classify bitcoin options, the main categories are bitcoin call options and bitcoin put options. There are many retail investors in the industry playing bitcoin futures contracts, but the probability of being caught off guard is not small. The Binance JEX platform believes that BTC call options have three major advantages: limited losses, unlimited gains, fast rises, slow falls, and super leverage that will not blow up.
1. Bring a large amount of emerging funds and flows to the cryptocurrency market, and provide more liquidity for the Bitcoin trading market.
2. It provides a federally regulated and compliant system for institutional and retail investors to purchase Bitcoin, and provides institutional investors with a stable and safe access to the cryptocurrency market.
In addition, in terms of the validity period of the bitcoin option contract, it includes weekly bitcoin options (in weeks) and monthly bitcoin options (in months). From the point of view of exercise, it can be further divided into European-style bitcoin options (can only be exercised on the exercise date), and American-style bitcoin options (can be exercised at any time before expiration).
