US Bitcoin Derivatives Market, Highlights of 2019

The United States Bitcoin (BTCderivatives market witnessed a slew of developments in 2019 as “old players” set trading volume records and “new players” introduced novel market products. After months of regulatory maneuvering, Bakkt finally launched and has gone on to post record Bitcoin futures trading volumes.

Several platforms have also obtained Swap Execution Facility licenses from the U.S. Commodity Futures Trading Commission as the crypto derivatives arena in the country expanded throughout 2019. One of the 19 CFTC-licensed platforms, Tassat, said the approval is a preliminary step to the company listing physically settled Bitcoin derivatives for institutional clients.

Overall, 2019 saw the emergence of the Bitcoin derivatives market transitioning from a corner of the broader crypto trading landscape to taking a more significant place within the industry as a whole. With the U.S. Securities and Exchange Commission refusing to approve any Bitcoin exchange-traded funds, Bitcoin derivatives seen to have become a firm favorite for institutional crypto traders, at least in the U.S.

Outside the country, the crypto derivatives bug appears to be spreading, with nations like Singapore taking definitive steps to regulate the market adequately. However, in the U.K., financial regulators are reportedly planning to issue a ban on crypto derivatives, citing customer protection concerns. The U.K. government says it will not interfere in the decision, and several industry stakeholders have called on authorities not to go ahead with the planned prohibition.

CBOE pulls out, CME trades $92 billion in two years

With the Chicago Board Options Exchange pulling out of the Bitcoin futures market in March 2019, the field became clear for the other provider of cash-settled BTC futures — the Chicago Mercantile Exchange. When CBOE decided to pull out, the underlying asset was still recovering from a 2018 price drop that saw BTC almost slide below $3,000.

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