In a significant move for the cryptocurrency market, the Chicago Mercantile Exchange (CME) has announced the launch of futures event contracts for Bitcoin (BTC). These contracts, fully regulated and cleared after administrative review, will offer a cash-settled, daily expiring option tied to Bitcoin futures. This development is aimed at providing investors with a “lower-cost way” to trade their views on the price movements of Bitcoin.
Tim McCourt, the global head of equity and FX products at CME Group, highlighted the benefits of these new contracts, stating that they provide a limited-risk, highly transparent way for a wide range of investors to access the Bitcoin market through a fully regulated exchange. McCourt also noted that these cash-settled contracts will complement CME’s existing suite, which has already traded more than 550,000 contracts to date.
SEC Denies VanEck’s Spot Bitcoin Trust Application
In related news, the U.S. Securities and Exchange Commission (SEC) recently denied asset manager VanEck’s spot Bitcoin trust application. This decision by the SEC marks another denial for spot Bitcoin trust applications, with almost 20 such denials occurring over the last six years.
Grayscale’s Ongoing Lawsuit with the SEC Over GBTC
Meanwhile, digital currency management firm Grayscale continues its legal battle with the SEC over the denial of its Grayscale Bitcoin Trust (GBTC) to be converted into an exchange-traded fund (ETF). A recent transcript related to the lawsuit revealed comments from Judge Neomi Rao, who questioned the SEC’s stance, noting that Bitcoin and its derivatives “move together 99.9% of the time.” This comment suggests a need for a more apparent distinction in the SEC’s view between Bitcoin and its derivatives.
GBTC Trading at a Discount
Currently, GBTC is trading at a discount of 38.19% to its net asset value, which is an improvement from its historic low of 50%. The discount indicates market scepticism or uncertainty regarding the trust’s underlying asset. Grayscale’s litigation with the SEC is ongoing, and the outcome of the lawsuit could have significant implications for the cryptocurrency market.
Overall, these developments reflect the evolving regulatory landscape surrounding cryptocurrencies and the increasing interest from traditional financial institutions and regulators. The launch of Bitcoin futures event contracts by CME and the SEC’s denial of VanEck’s spot Bitcoin trust application underscore the complexities and challenges facing the cryptocurrency market as it seeks broader acceptance and integration into traditional financial systems.
