In an interview with Bloomberg on July 26 2018, the CEO of CME Group Inc., Terry Duffy claimed that the company will stick to Bitcoin future offers when asked about the possibility of expanding futures to other cryptocurrencies.
CME, Chicago Mercantile Exchange is an American financial market company operating on options and futures exchange; it stands as the world’s largest exchange operator. In December, 2017, the company launched Bitcoin futures – future contracts that are based on the price of Bitcoin.
As are many, Terry Duffy, the Chief Executive Officer of CME Group too remains skeptical about the long term consequences of cryptocurrencies saying that Bitcoin futures “might have been the most controversial launch of a product” which was followed by his denial of expanding the future contracts to other cryptocurrencies for now.
Terry claims that they have a lot of control even on Bitcoin and the company seems to be very careful in its use of the Bitcoin futures as Terry continued;
I do not want the average person who has never participated in the derivative contract to be trading CME Bitcoin Futures because it is highly volatile and it’s new.
This is understandable as last year, in December 2017, with the introduction of Bitcoin futures by CME and its rival CBOE, the price of Bitcoin rose dramatically and broke through the $20,000 barrier. However, this rapid increase was short lived and Bitcoin faced a steep fall to $6,000 just next month. This was the third worst correction in its history with a 72%decline from its all-time high.
Terry says that he wants to see how Bitcoin future goes, before taking upon other currencies. On 6 to 8 months listing of Bitcoin he said, “are not enough to decide what your other listings should be.” Expressing his concern for his company’s reputation and credibility, Terry said;
I will not just put products up there to see where they’re going to go, I will take a wait and see approach with Bitcoin for now.
This cautious and careful approach towards cryptocurrencies was also seen in February this year, when the company claimed that using other cryptocurrencies would be irresponsible.
When asked about the flow incoming via Bitcoin futures, Terry said: “We’re not seeing huge flows regardless and that’s OK” saying further that however, that the flow is not centralized and they are receiving it from different parts of the world.
From the data compiled by Bloomberg, CME is averaging at 3,063 contracts per day amounting to 15,317 Bitcoin daily which is more than double of its rivals, CBOE, the Chicago Board Options Exchange. In the second quarter, CME’s total average daily volume was 18.4 million contracts which as reported by CME in a twitter post, with an average daily volume (ADV) increased by 93% over the first quarter of this year.
Bitcoin futures average daily volume in Q2 grew 93% over previous quarter, while open interest surpassed 2,400 contracts, a 58% increase. Learn more about trading #Bitcoin futures: https://t.co/adjWVWXBPQ pic.twitter.com/UQWC3nGGrI
— CMEGroup (@CMEGroup) July 20, 2018
Since late last year, Bitcoin futures have been traded on two futures markets, the Chicago Board Options Exchange (CBOE) and the CME Group exchange. The two companies have remained fierce rivals in the business. CBOE seems to have a very enthusiastic approach towards using altcoins (or other cryptocurrencies than the Bitcoin) in developing future contracts at CBOE futures, while CME seems hesitant and very cautious with its Bitcoin futures and does not want to take any risky steps.