Cboe, a major derivatives exchange, has announced plans to launch “Continuous futures” for bitcoin and ether, targeting a release date of November 10, pending necessary regulatory approvals. This new product aims to mirror the perpetual futures contracts commonly found on offshore exchanges while incorporating adjustments to comply with U.S. regulatory standards.
One of the defining features of Cboe’s Continuous futures is their extended lifespan, lasting up to 10 years. This contrasts sharply with traditional futures contracts, which typically have monthly or quarterly expiration dates. The extended duration minimizes the necessity for traders to frequently “roll” their positions into new contracts, a process that can be both expensive and time-consuming. Instead, these Continuous futures will be recalibrated daily based on spot market prices, utilizing a transparent funding rate mechanism.
For traders, this presents a significant advantage. Those looking to maintain long-term exposure to bitcoin, for instance, can invest in a Continuous futures contract and retain it for years without needing to adjust their position. Additionally, the contracts will be cash-settled, meaning that no actual bitcoin or ether will change hands; settlements will occur in U.S. dollars, closely linked to the spot prices of the cryptocurrencies.
Catherine Clay, Cboe’s head of derivatives, expressed optimism about the new offering, noting the strong adoption of perpetual-style futures in overseas markets. She anticipates that Continuous futures will attract not only institutional participants and existing Cboe Futures Exchange (CFE) customers but also a growing number of retail traders eager to access crypto derivatives.
The futures will be cleared through Cboe Clear U.S., a derivatives clearinghouse that operates under the oversight of the Commodity Futures Trading Commission (CFTC), ensuring compliance with regulatory requirements. This strategic move aims to enhance the accessibility and efficiency of cryptocurrency trading in the U.S. market.
