CME to increase monthly limit on Bitcoin (BTC) futures bitcoin positions

The Chicago Mercantile Exchange (CME Group) will increase the monthly limit on Bitcoin Futures open positions to 10,000 BTC or 2000 contracts.
  • The exchange is set to increase the monthly limit for Bitcoin contracts.
  • The market has stabilized and become less speculative.

The Chicago Mercantile Exchange (CME Group) will increase the monthly limit on Bitcoin Futures open positions to 10,000 BTC or 2000 contracts.

“Increased spot-month position limits in CME Bitcoin futures will be available Sept 30, pending reg review. Limits will increase to 2K contracts, equal to 10K bitcoin, to provide customers,”CME wrote on Twitter.

The change will take place on September 30 subject to CFTC approval.

Currently, open positions are limited by 1,000 contracts or 5,000 BTC; however, it has never been reached. CME is confident that the growing interest in flexible risk hedging instruments for bitcoin is yet to come.

Limits on open positions are set by the CFTC to prevent market manipulation. If the agency approves the changes, it will recognize that the likelihood of excessive speculation in the bitcoin market has decreased.

In 2019, an average of 7,100 Bitcoin contracts was concluded daily on the CME, and the average daily trading volume was $237 million (as of the end of August). A record number of large open interest holders is 56. According to the press release, the exchange has seen “20 successful, uneventful settlements.”

Read also: Derivatives for Bitcoin Cash may become a possibility in the nearest future

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CME Looks to Bolster Bitcoin Futures Product Ahead of Bakkt Launch

Over the past few months, the Chicago Mercantile Exchange (CME) Group Bitcoin futures contracts have become increasingly important in this …

CME Looks to Improve Bitcoin Product

Over the past few months, the Chicago Mercantile Exchange (CME) Group Bitcoin futures contracts have become increasingly important in this budding market. In fact, as the financial institution pointed out that since foraying into cryptocurrencies in December 2017 — just around the $20,000 peak of the last bull market — its Bitcoin market has processed the equivalent of 10 million worth of BTC (more than 50% of all coins in circulation) in volumes. Crazy, right?

Volume update: As of July 23, CME Bitcoin futures have traded over 2M total contracts (10M equivalent bitcoin) since the December 2017 launch. Explore BTC: https://t.co/Z1LGfdrbFLpic.twitter.com/NkmQnMnliM

— CMEGroup (@CMEGroup) July 23, 2019

This doesn’t seem to be good enough for CME, however. According to a report from CoinDesk, the CME is planning to increase the month position limit for its Bitcoin futures contracts to 2,000 contracts from 1,000. As each contract is worth five BTC, this would allow a trader’s maximum exposure to be some $100 million.

According to the CME in a comment to CoinDesk, its cryptocurrency market currently doesn’t have clients that trade in such large volumes. Yet, the comment elaborated that the CME sees the potential for growth in its Bitcoin futures, meaning that the limits may one day be relevant due to the “significant and acceptance” of the CME’s cryptocurrency market.

As it stands, CME is currently the only large financial institution that is offering such contracts for such a nascent market. So, if Bitcoin continues to rally and gain traction in institutional circles, these limits might actually start to be approached.

Bakkt On Its Way

The CME’s decision to make this change to its Bitcoin futures market comes ahead of the launch of Bakkt, the Intercontinental Exchange-backed cryptocurrency startup slated to revolutionize a number of facets in this budding industry.

Earlier this month, the firm launched its custody service for institutional clients, accepting Bitcoin deposits. On September 23rd, it is expected to follow up the launch of its warehouse by starting to offer the first physically-deliverable Bitcoin futures contract. Bakkt is reported by markets analysis firm Fundstrat to have a “critical mass” of institutions ready to adopt Bakkt’s Bitcoin futures at launch on September 23rd. the outfit’s Sam Doctor said earlier this year that the exchange is going to give institutions on the edge about cryptocurrency the push to actually begin investing in Bitcoin.

Would it be crazy to assume that the CME is trying to bolster its product to keep clients from jumping ship for Bakkt? No, maybe not.

Title Image Courtesy of Unsplash.com

CME Asks CFTC to Double Bitcoin Futures Capacity as Interest Soars

The Chicago Mercantile Exchange (CME) Group is petitioning United States regulators to allow its clients to double their open Bitcoin futures positions …

The Chicago Mercantile Exchange (CME) Group is petitioning United States regulators to allow its clients to double their open Bitcoin futures positions.

Double open positions limit, says CME

According to Nasdaq on Sept. 12, CME has already put its plans before the Commodity Futures Trading Commission (CFTC).

If successful, each investor would gain a monthly limit of 2,000 contracts per spot month instead of the current 1,000.

The move comes on the back of constant growth in demand for Bitcoin futures, with CME’s volumes setting new records on a regular basis.

As Nasdaq notes, the CFTC officially states that lower-risk trading instruments are not subject to limits. Therefore, an agreement to lessen the strict controls for CME could be construed as the regulator having more faith in Bitcoin (BTC) options than before.

“This is one more way we’re providing customers, institutional traders and end-users with additional flexibility to trade and hedge bitcoin price risk,” a spokesperson told the publication.

March of the Bitcoin futures contracts

CME was one of the first Bitcoin futures operators, launching its product in December 2017. Since then, the market has expanded, with the second half of this year set to see a significant increase in overall interest.

Later in September, Bakkt, the regulated trading ecosystem for institutional investors, will launch physical Bitcoin futures, which pay out returns in BTC instead of fiat currency.

Cryptocurrency exchange Binance is currently testing two potential futures trading platforms.

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CME looks to double monthly open positions limit of its bitcoin futures contracts

The Chicago Mercantile Exchange (CME Group), the only exchange that currently provides bitcoin futures contracts in the U.S., is looking to double …

The Chicago Mercantile Exchange (CME Group), the only exchange that currently provides bitcoin futures contracts in the U.S., is looking to double open positions limit of the product.

CME has written to the U.S. Commodity Futures Trading Commission (CFTC) for the proposed move, which would increase the limit from 1,000 contracts per spot month to 2,000.

One contract is for five bitcoins, which means the change, once cleared by the CFTC, would increase a trader’s maximum exposure to 10,000 bitcoins from the current 5,000. The change would then take place from the Oct. 2019 contract month and all contract months thereafter.

CME Group has been offering bitcoin futures contracts since late 2017, and the exchange is now gearing up to launch another bitcoin derivatives product, as reported by The Block last week. The new product could launch before the end of this year.

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CME Wants to Double Its Monthly BTC Futures Trading Cap to USD 100M

The Chicago Mercantile Exchange (CME Group) has announced that it intends to double its monthly Bitcoin futures trading cap to BTC 10,000 (USD …

The Chicago Mercantile Exchange (CME Group) has announced that it intends to double its monthly Bitcoin futures trading cap to BTC 10,000 (USD 103 million) – and has already asked America’s Commodity Futures Trading Commission (CFTC) for regulatory permission.

Currently, individual investors may not purchase more than 1,000 contracts per month, with each contract representing BTC 5. But per a letter to the CFTC hosted on the CME Group’s website, the group says it wants to boost that number to 2,000, for a maximum limit of BTC 10,000.

The company says it “deems [the new proposed limit] to be adequately stringent to discourage attempted manipulation of the Bitcoin Reference Rate benchmark in connection with final settlements of expiring contracts.”

The CME says that its increased spot month limits will become effective at the close of trading on September 30 for the contract month of October 2019 and subsequently, although its move is still subject to CFTC approval.

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The company took to Twitter to further explain its decision.

Increased spot-month position limits in CME Bitcoin futures will be available Sept 30, pending reg review. Limits w… https://t.co/hBvsnn2fLD

— CMEGroup (@CMEGroup)

The CME Group is currently the only American entity offering Bitcoin futures, after the group’s rival, the Chicago Board Options Exchange (CBOE) pulled the plug on its own offering in March this year.

CME Wants to Double Its Monthly BTC Futures Trading Cap to USD 100M 101
The number of contracts traded on the selected date for all CME Group venues. Source: CME Group

However, as previously reported on Cryptonews.com, Bakkt has already begun testing its own Bitcoin futures product, and hopes to begin offering this via the ICE Futures US exchange starting September 23.

Earlier this week, Bitcoin.com stated that it was hopeful of convincing the CME Group to list Bitcoin Cash futures derivatives.

Meanwhile, major cryptocurrency exchange Binance said that their Binance Futures will go live today, September 13. The company added that all users will receive a 50% discount on trading fees when trading on Binance Futures for the next 3 months.

At pixel time (06:21 UTC), bitcoin trades at c. USD 10,367 and is up by 2.5% in the past 24 hours, while it’s down by more than 3% in the past week.

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