Key facts
- CBOE is reportedly considering converting its continuous Bitcoin and Ether futures into perpetual futures.
- This potential move aims to position CBOE to compete in the growing crypto derivatives market.
- The exploration follows recent U.S. regulatory approvals for perpetual futures products.
- Perpetual futures, unlike traditional contracts, do not have expiration dates.
- The Chicago Mercantile Exchange has filed a lawsuit against the CFTC regarding perpetual futures approvals.
The Chicago Board Options Exchange (CBOE) is reportedly exploring the conversion of its continuous Bitcoin and Ether futures contracts into perpetual futures. This strategic consideration comes as the U.S. regulatory landscape for crypto derivatives evolves, with the Commodity Futures Trading Commission (CFTC) recently approving perpetual futures for prediction market Kalshi and outlining a path for other registered exchanges.
Rob Hocking, CBOE's global head of derivatives, indicated the exchange is examining this product overhaul, though no timeline or specific benefits were disclosed. CBOE launched its decade-long Bitcoin and Ether futures in December. Perpetual futures, known for their lack of expiration dates and reliance on funding payments to track underlying assets, have become the dominant product in crypto derivatives, popularized by exchanges like BitMEX.
The CFTC's recent approvals have spurred significant activity, with Kalshi's crypto perpetual futures reportedly generating over $8.5 billion in trading volume within weeks. However, this regulatory shift has also faced opposition. The Chicago Mercantile Exchange has filed a lawsuit against the CFTC, alleging that Kalshi's offerings violate federal law and cause competitive harm to established exchanges.
Beyond CBOE's potential move, the perpetual futures market is expanding across various platforms. Coinbase has introduced perpetual futures tied to stock indexes and U.S.-listed stocks for eligible traders. There is also increasing interest in commodity perpetuals, driven by market volatility. Decentralized exchanges are major contributors to perpetual trading volume, processing billions of dollars daily.